Have you ever wondered why people usually say “whenever I buy shares the prices becomes low and when I sell them immediately after that the prices becomes high”.. this is the case with most of us with regrets in mind . For example: One say’s “I bought “XYZ Company” at Rs.5000 and immediately after I bought the stock price dropped to Rs.4500.” I feel sad. Another comes with a different version “I sold “XYZ Company” at Rs.4500 and it went up to Rs.5500 same evening” I made an imaginary loss of Rs.1000per share.
Solution:
You can buy more shares @ Rs.5000 and reduce your overall buying cost. This has to be done only if believe in the fundamentals,management and the future prospects of the company.
To do this , you should keep your money ready for whatever reason you want to buy the shares. Then while buying a share only spend 50% of your money in one go and when you see the next change in the market use another 50% of the money to buy shares at lower cost. By this method you’ll be having maximum shares to sell few in loss and few in profit.
Also now if you have 200 shares of XYZ Company 100 @ Rs.2200 and 100 @ Rs.2000.Then the price goes up to Rs.2400. Sell only 100 of the shares.Then if the price further shot up, you have some shares to sell And participate in the rally to make money.
Next, You sold the share and the price went up. The solution to this is never sell all the shares at one time. Sell only 50% of your shares.So if he price goes up later you still have the other 50% to sell and make profit.
The golden Rule is to first do your own analysis of the stock before investing and buy on tips.
Also invest only in companies which declare dividends every year. To be sure that you are not investing in loss making companies.