We live in a dynamic, evolving, uncertain world. The investment landscape is too constantly changing with uncertainty being omnipresent. The wisdom to know what to do and how to act in the face of this uncertainty will decide who and what will succeed or fail. This is the reason we must time and again go back to the fundamentals of investing, especially equity investing. Presented here as commandments, these are the ground rules and behaviour which suggest specific actions to pursue or avoid. The 10 commandments distil the collective wisdom of investment gurus and are timeless in their relevance and importance, and we need to remember it from time to time. In an uncertain investing world, the below ten commandments can help you navigate and find success as an investor. You Shall Avoid Emotional Investing “If you can’t control your emotions, you can’t control your money.” - Warren Buffett. This is the most important commandment and hence the first on the list. Without separating emotion
The title of the article may sound like a chapter from a psychology book. But hardly is it academic in nature. This time around, we would take a look at what goes on in our minds before we take any investment decision. Investment decision-making is like a coin with two sides – one which is about facts, figures, objectivity, planning & so on. This is the heads side of the coin. The other side is about how we are, our emotions and our behavior. For most of us, our coins don't often land up as heads. Let us then see at ourselves and look at these behavioral patterns more closely. Personal Business: Everyone has a favorite. And the good thing about having favorites is that you tend to know more about them. In investments too we have our favorites and that is where we would be mostly investing. For some, it may be equity, for some bank fixed deposits and for some, insurance plans. But the problem really starts when we tend to ignore other better options while feeling comfortable wit