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Qualities required to be an Investor

*Patience
*Persistence
*Discipline
*Flexibility
*Willingness to research and learn
*Willingness to admit mistakes
*Ability to ignore general panic
 
Four common qualities of a Great Investor
1. The discipline to refrain from speculation.
2. The courage to buy what's currently out of favor.
3. The conviction to hold steady (or add to an existing position) when the share price drops.
4. The patience to wait for Mr. Market to come around.

" Investing is a trait more of the character than of the brain"
 - Graham

Two ways of being an intelligent Investor
1. By continuously reaserching, selecting and monitoring a dynamic mix of
    stocks.
2. By creating a permanent portfolio which runs on auto pilot and requires no
    further effort.
Rules to select stocks for Investments
1. Adequate diversification
2. Each company large, prominent
    and conservatively financed
3. Long record of continuous dividend
    payments
4. Limit on price to pay for the stock
 
Five secrets to buying stocks
1. Buy cheap.
2. Buy quality.
3. Buy to hold.
4. Buy with minimal expenses.
5. Buy without leverage

Averaging means
Buying into selected stocks regularly as per a long term plan.

Mutual Funds
It is the second choice only if you can not make investments directly.
While advantages are obvious, here are some disadvantages

1. YOU need to be in control and understand your investments, here it is the fund managers.

2.Management / managers turn over

3.Panic buying/selling in sharp up/down turns and its negative effects

.
Characteristick of a growth stock
Striking tendency towards wide swings in market price

 

PE OR PEG RATIO TO USE

None is perfect but lower PEG preferably less than one is better if you can estimate the growth correctly.  

 

On day Trading
 
"Day trading is one of the best weapons ever invented for commiting financial suicide."  

On new issues (IPOs)
Subjected to careful examination and
are backed by special salesmanship
Sold under favourable market conditions
Usually favourable for the sellers but not for the buyers.

NEVER LIMIT YOUR PROFITS ; LIMIT YOUR LOSSES
When you decide and buy a share, also decide the stop loss level at which you will stop your losses and sell. e.g.10% or 15% depending on many factors. When stock price rises, keep increasing your stop loss as per the new price.

Avoid
*Investments you do not understand
* Investments in single assets class
* Investing with borrowed money
* Margin trading and leveraged
   trading
* Investing on rumours and through    
   brokers or on their advice.
NOTE-
Futures and options too are speculation and as dangerous as daytrading.