How not to lose money in the Indian stock market?

Let me begin by saying I'm not a financial advisor. However, these are some tips that worked for me and I see no reason why it will not work for you.
  1. The first rule is to invest money that you will not need in the short term i.e., at a minimum within the next one year.
  2. Instead of investing in individual shares, please invest in an equity mutual fund. Depending upon your risk propensity, you can go for a large cap fund (lower risk - lower returns), multi cap fund or a mid /small cap fund(higher risk - higher returns). The top performing funds in each of these categories are listed in websites such as moneycontrol and valueresearch.
  3. Investing in a mutual fund diversifies the risk as your investment is spread across shares of a number of companies. Also, the mutual fund is managed by a professional fund manager.
  4. Never time the market. A systematic way of creating wealth is to invest systematically on a periodical basis preferably monthly. This is commonly known as Systematic Investment Plan or SIP. Most of us follow the herd mentality, we invest in the stock market when the market is overvalued and disinvest when the market crashes and hence end up losing money. This is avoided by having a SIP.
  5. Finally, please check your investments on a periodical basis at least once every 12 months. This will help you make course correction if necessary.
Happy investing and let me know if this helped.

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