5 stock market investing myths busted

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Buy good stocks and just forget

You may be good at choosing a good deed, but holding on to it until eternity will never make sense. It is with the change in weather that you need to align your investments accordingly, otherwise you will be left hanging. This is said because sometimes successful companies with a large market share fail to realign their business and end up. So just when you are trying to time the market and want to enter the scrip at the right time, you also need to exit your positions at the right time.

    Buy stocks you use frequently or know the brand value

Buy stocks you use frequently or know the brand value

Having a high brand equity is not a certainty for the stock to rise and rise and propel gains for your stock portfolio. The simple case may be the stock of IRCTC which is the service used nationwide and despite the stock has been stored and stocked. At the time of this writing, IRCTC, since the time of the stock split and post-adjustment price adjustment, is now trading at a discount of more than 50% from its high price of Rs over 52 weeks. 1279.

    Invest in companies with high dividend yields

Invest in companies with high dividend yields

Dividend-generating companies can certainly help provide some stability in tough times. However, running only on dividend-paying stocks will never be a good idea. As over a period of time, stocks are invested to create wealth in order to achieve our long-term financial goals. If let’s say there is no growth in a stock and it just makes up for the loss of growth with the return, that’s just a trap that can sometimes be.

    Invest in companies with a high ROCE

Invest in companies with a high ROCE

Often similar to mutual funds, we consider the company’s past performance and then can try to choose. So, likewise, it is not certain that a stock with a good ROCE history will perform and continue to perform well. Also, in the same way, it may also happen that companies that have not performed well in the past due to some relevant and strategic changes may see improvement despite low RoCE earlier.

Go by going stop loss investing

Go by going stop loss investing

Stop losses are applied strictly to limit or reduce losses. To explain, let’s say you invest in Company X at a price of Rs. 100, then put a stop loss at Rs. 60, so in one case it drops to Rs. 60, your positions in the stock will be cut and your losses or declines will be limited. But it should be mentioned that stop loss investing is for investors who make aggressive bets and take high risks. For you and me, who agree with a moderate profile, stop loss investing is not judicial. In addition, it is for trading that we undertake to apply the stop loss.

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