10 Golden Rules Of Investing In Stock Market

The eminent American businessman, an investor, and CEO of Berkshire Hathaway, Warren Buffett once said, “the only two rules of investing are (1) Never Lose Money and (2) Never Forget Rule 1.”

The stock market is never certain, therefore, buying and selling in this ambiguous market require deep knowledge and understanding. Proper knowledge helps you turn your investment into a hefty profit. Undoubtedly, investment in the stock market is a significant pillar of a well-planned financial future. Whether investors make listed share investments or unlisted shares investments, the stock world offers plenty of opportunities to grow wealth. Nevertheless, up to 90% of people lose money in the share market due to poor strategy.

This unprecedented scenario leaves investors in a state of chaos, whether to invest or not. Therefore, to help you grow your money in the stock market, we have compiled a list of 10 golden rules of investing in the stock market. Let’s now look under the hood.

Must follow golden rules of investing in the stock market

If you do not want to lose money in the stock market,  follow the given listed golden rules to grow your money without putting it at risk.

Avoid the herd mentality

The fact is that people like to jump on to the bandwagon, that’s where a typical buyer easily gets swayed by the actions of his friends, camaraderie, relatives, etc. If everyone around you is investing in specific stocks, you may also want to do the same. This is nothing but going to give you a backfire in the long run. We suggest you avoid herd mentality and gain deeper knowledge about the stock market before investing. It is crucial for you to find the best unlisted shares brokers in India to understand the fundamentals of the share market and how it works. You can connect with experts to get more insights.

Make an informed decision

According to Warren Buffet, risk comes from not knowing what you’re doing. If you have made a decision about investing in the stock market without having proper information and evaluation about the stock market, you’ll lose money. Before making a decision, it’s important for you to conduct proper research on the market, the company you’re going to invest in, and other relevant things. This way, you will put money safely in the stock market. 

Invest in business you understand

Do you want to invest in a stock or business? Try to invest in industries you’re familiar with and know well how they work. However, before investing in any company, you should also get to know the business of the company it deals in. Having proper research on the company will help you whether to invest or not. 

Don’t try to time the market

Timing the market is basically a strategy, which involves buying and selling stocks based on price fluctuations. It means most investors wait for the market time to buy stocks at a low price and sell them at a high price. Since this market is unpredictable, the best strategy for you is not to try the market time at all. It is also because trying to time the market leaves you in a vulnerable situation where you constantly think about price changes. 

Follow a disciplined investment approach

Another golden rule is following a disciplined investment approach. Usually, it is seen that people who put money in the stock market in a systematic way tend to yield outstanding results on their unlisted shares investment. Moreover, you also need to have some patience, proper research, and a disciplined investment approach by keeping a long-term investment purpose in mind. When it comes to making investments in the best unlisted shares in India, you need to be prudent to make any decision. 

Do not let emotions hamper your judgement

One of the biggest reasons why people lose money in the stock market is their inability to control emotions, especially fear and greed.  It is almost impossible to resist the lure of quick wealth. No doubt, people listen to stories of investors making money in a short period of time, this excites them to buy shares of unknown companies. It is also suggested not to be guided by your emotions when it comes to investing in the stock market. Wondering how to buy unlisted shares in India? Get an unlisted share broker in India. 

Create a broad portfolio

Indeed, investment in the stock market is very helpful in diversifying your portfolio across asset classes and instruments. As an investor, you shouldn’t forget that diversification of a portfolio is the key factor to earning maximum return on investment with minimum risk. However, the level of diversification depends upon the level of risk-bearing capacity you have. 

Have realistic expectations

It’s always good to be optimistic and have the best hopes for your investment. Well, you can also invite trouble if your investment goals are based on unrealistic assumptions. You should be aware that the stock market remains uncertain and unpredictable, and fluctuations in price keep on happening. According to experts, earning more than 12% in the stock market is pure dumb luck. If you’re still not satisfied with this return, you’re inviting trouble for yourself. 

Invest only your surplus funds

This golden rule is for those who have already invested money in the share market. Even if you want to take risks in a volatile market, this golden rule will surely work for you. Firstly, check whether you have surplus funds in your account that you can afford to lose. However, it is not imperative that you will lose money, you can also expect to have some great returns. Always remember one thing, investment in the share market is always about putting money at a risk.  

Monitor rigorously

The financial market easily gets swayed by things happening across the world. Therefore, it is important for investors to keep monitoring their portfolios and check on the price fluctuations. In any case, if you’re unable to track your portfolio or lack significant knowledge, then you should consider taking the help of the best unlisted share brokers in India for a better understanding of the share market.

Be Patient And Stay Disciplined

When it comes to investment, emotions are an investor’s greatest enemy. Don’t try to be emotional and put your money on a company you like irrespective of the company’s performance. Another important thing is to be patient. You can’t always get the desired return in a specific period, you will have to wait if you want to make a good profit. Remember, going into a trade is very easy but determining when to leave a trade is the hard part. Sometimes you have to make a loss in order to make a profit on the next trade. You will have to put aside your fear and greed and make the most objective decision possible. 

Take An Experts Opinion

Even after trading for years, people find it hard to predict the market. This is why you should always have an expert’s opinion on your investments. You can hire an expert or consult anyone with this expertise. Nowadays, some many websites and platforms analyze you and provide you with the most credible and robust information so that you can make an informed decision and make a profit. 

Get To Know About The Market

Before making any investment, you should first learn how the market works and how the prices are decided. You have to know about the basic financial metrics and other metrics taken into account while pricing a share. Only after understanding these things can you make an informed and profitable decision.

Are you searching for the best unlisted share trading platform or the best pre-IPO stock to buy? Stockify is here to help you with everything you need regarding unlisted shares. We aid potential investors to find the best unlisted shares in India and grow their wealth significantly.

Table of Contents

Excited to kickstart your adventurous journey of unlisted share trading? Here are 10 golden rules of investing in the stock market you should know.


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Piyush Jhunjhunwala
Piyush Jhunjhunwala
CA, CPA, Ex. PepsiCo, Reckitt, Coty
CEO & Founder
Dubai, UAE.
Rahul Khatuwala
Rahul Khatuwala
Ex. Wipro & Finaco Founder
Bangalore, India.