5 Rules of Investing in India

5 Rules of Investing India - Best Investment strategies.

5 rules of investing - India

5 Rules of Investing in India - Every Indian Should Know

  • These are 5 important or life-saving rules for safe investments.
Investing Is The Key To Financial Success. You Need To Start Early To Achieve Your Financial Goals, Investing Is More Psychology when making money. Warren Buffet has a very strong psychological state through which he has become the largest and the biggest investor in the world. He also has done some mistakes in investing but with strong perseverance and will power he has achieved something which till today nobody has achieved in the stock markets around the world.

Today I will be discussing 5 rules for stock investing for long term investments which are time-tested and I can help anyone who is serious to become a long-term investor in the stock market.

5 rules of investing - India

Let's start:-

1. The first rule is that you need to invest as early as you can in your lifetime.
    As per studies, Warren Buffet has achieved this unachievable piles of money which any of his competitor investors are unable to do is because he started at a very young and tender age when he was only 11 years old. So Rule No.1: Teach your kids How to do Investment planning and see them grow later in life.

    The Secret formula of compounding which is also known as the 8th wonder of the world. it doesn't matter with how much money you started because with compounding and years to come it will multiply into tens and 100 thousand folds. 

    The sooner you start investing in assets that produce a reasonable rate of return -- and the more you invest in those assets -- the harder your money will work for you.
    If you start investing now, for the next 25 years I can give you in writing or guarantee that you will become a millionaire.

Of course, you have to follow some rules and invest in time-tested and blue-chip companies which have an economic moat and are not prone to fall down easily. 
2. Always take some calculated risk. 

    As discussed earlier that you have to start earlier in your lifetime now the second rule is that you need to take a calculated risk for every trade you take, Which literally means putting aside the money you don't spend, investing means buying assets that have the potential to provide a reasonable rate of return. 

    If you are making a lot of money but you have a habit of keeping the money in a bank account, that money loses value over time thanks to inflation. To tackle the problem of inflation you need to put your money to work for you. 

    Doesn't mean that you put all your money in one basket or stock as you don't want to put all your eggs into one basket, so if the basket falls down you lose all the eggs. always have a calculated risk and a diverse portfolio for doing that you may take some financial advice from somebody who has good in-depth knowledge of investing in stocks. 

    Everyone has a different risk tolerance, but the general rule of thumb is to not invest in riskier assets -- such as beaten-down stocks -- when you're young and have time to recover from downturns.

 But when you're old you look for safe haven and companies like Coca Cola, Bank of America, in India it could be Reliance, HDFC Bank, Hindustan Unilever, Nestle etc. 

3. You should not invest the money which you need for your daily purpose.

    While investing is important, you should not invest money which you need for your daily purpose or livelihood. You don't want to become a trader rather than an investor. there is a very strong temptation of buying and selling stocks as they are so liquid and you can sell them with the click of a button. and if that becomes your habit you are not an investor but a speculator rather. 
    Investment requires time to grow up And if you don't have money to put it in the stock market and give it some time you cannot make real money in the market. And you should invest only that money which is not required for any weather downturns and is a free extra saving.
    Earning money from Investing is a long-term game and you should follow this rule of investing with sacrosanctity
If you're going to need your money after some time all for your sister's wedding it's better to keep it in a fixed-deposit as short term traders have a very high percentage of losers in the market
    A good rule of thumb is to keep cash in a savings account if you'll need it within the next two years, rather than investing it.
but if it is free money you can surely invest this money in good quality stocks and this money will work for you day and night. 

4. Never invest in a company which is going downwards ( Stop catching a falling knife).

    Taking calculated risks requires you to actually understand both the potential reward and the likelihood of loss.

That means you need to know how the investment will make you money, whether the asset has a history of providing promised returns, and how losses could happen to people who try to catch a falling knife.

    Unfortunately, too many investors jump on bandwagons without knowing why. It's this phenomenon that led to a lot of looses.
Always Check Fundamentals of a company thoroughly before investing or take some help of Financial Advisors.  

5. Diversify your portfolio.

Minimizing investment risks means not only understanding how investments work, but also ensuring you don't put all your eggs in one basket.

While you may have a particular company you love, if you put your all money into buying stocks and it turns out the company is a fraud company and who was manipulating the books, you could lose everything.

To reduce the likelihood of big losses, spread your money around a mix of different assets. You could, for example, put some of your cash into big Blue Chip companies in India like those mentioned above., but also invest in emerging markets or real estate with the hope that if some of your investments perform poorly, others will do well.

If diversifying your portfolio and getting the right mix of different assets sounds complicated, you can opt to invest in target-date retirement funds that give you exposure to a mix of different assets appropriate for your age and goals. Capital Partners can also help you build a diversified portfolio without requiring you to be hands-on. 

Investing can be easy -- and it's important
Investing doesn't have to be hard if you start early, understand investment options, and invest in a mix of different assets to minimize risk. 

    By following these five basic investment rules, you can invest your money in the right assets and maximize the chances that you'll end up with good money in your hands which will allow you to thoroughly enjoy your Sound Financial Life.


  1. Hello Sir, Thank you for your helpful post with Investment, I also agree with your post,,,,Every point are very important for us ,,,,Really good thinking

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Investor-Rocks: 5 Rules of Investing in India
5 Rules of Investing in India
5 Rules of Investing India - Best Investment strategies.
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