Correct way to earn from stock market investment.

Let us know how to invest in the stock market so that you can get good profit.

First of all I would like to understand you by taking the quote of a farmer. Do you know how a farmer starts his farming and then looks forward to the crop ripening or bearing fruit and how he cut it after that. Let me tell you in details.

When a farmer cultivates a crop, he does not grow one, two or four plants, rather he grows a lot of plants and the plants are of different fruits or vegetables. After planting the entire crop, he looks after it and with full patience, then he looks forward to the fruits of that crop.

Now the bad and rotten leaves are cut down in the field and if the farmer feels that a complete plant is getting sick and that not will be able to recover from the manure, then he cut that plant and replace it with a new plant.

The harvest time of different vegetable or fruit crops is also different.

And when a crop is ripened, it means that fruit starts coming on it, then he do not cut all the trees, but only harvest the fruits.

In the end, you see that not all plants grow into trees, but some die of disease, some fall in a storm, and some become very big trees and give very good amount of fruits and some produce less fruits. But in the end, the farmer gets good fruits in total.

These fruits he get is because of his patience, which the farmer maintained and did not grieve when some plants died or fell apart.

Now I would like to tell you that if you apply the same crops and farmer rules in the stock market, then you can also benefit greatly.

Now would like to know how. Let me tell you.

First of all, you should choose the best shares of every sector, just same the farmer does as he do not grow of one, two, or four plants but many plants and many different crops. In this way you have to create diversified portfolio.

Just as there is a right season and right time to plant a particular crop, similarly, you have to wait for the right time to invest in the good shares of a good sector, that is, when the prices of all the shares of a sector have fallen a lot and all those Shares are available at or below their book value.

Or you invest only if the share market falls below 20% from its highest level. When the stock market falls 20% or more from its highest level, it is called bear phase.

The stock market falls by 20% or more every 2 to 4 years, which makes the right time to invest for long term.

And if you want to invest for a short period, then you can invest when the stock market falls 8 to 10%. I would like to tell you that the stock market falls(8 to 10%) every year 1 to 2 times, which gives you the right investment opportunity.

After your portfolio is ready, you should wait patiently. when the market valuation increases and the market's price earning ratio exceeds 26, then you can sell few stocks from your portfolio. At that time, you should sell the shares that you had bought in high price.

Never sell good quality shares which you have bought cheap if you are a long-term investor.

By investing in this way, you can reduce the risk of stock market very much and earn good profits by investing for a long time.

How did you like this post. Please tell us in the comment box and do not forget to share this post.

With respect,
Team Nivesh-Shakti


Popular posts from this blog

Reminiscences of a Stock Operator by Edwin Lefèvre

Security Analysis By Benjamin Graham, David L. Dodd

The Intelligent Investor by Benjamin Graham