1st : Divide your portfolio in 50-50 percent
> Example if you have 1,000 rupees to invest then invest 500 on stocks and keep 500 in bonds or cash or invest in other investment options and maintain this 50-50 percent ratio.
- Suppose if you get 10 percent profit in stock and you have 60 percent money on stocks then remove 10 percent from it and again maintain 50-50 percent ratio and do it on a specific interval (example the month start when you get salary)
- Because it will have less risk with the help of the concept known as "Dollar Cost Average."
2nd : Diversification
> Means invest in 10 to 20 companies that to in different industries.
3rd : Large Companies
- Invest in big companies which are established from serval years.
4th : Conservatively Financed
- Invest in companies which are conservatively financed whose current ration should be 200 percent. In simple words, Companies whose assets should be more than its liabilities (Assets > Liabilities).
5th : Dividend History
- Invest on companies which are giving dividend continuously from 10-20 years.
6th : Earning History
- Invest on companies which did not had earning deficit from last 10-20 years.
7th : Growth
- Invest in companies which are growing with 3 percent every year from 10 years
8th : Cheap Assets
- Invest in companies whose stock price should not more than 1.5 percent times from its net asset value
9th : Cheap Earning
- Don't give much money for earning means whose PE ratio (price-to-earnings ratio) is less than 15 for last on year buy those.
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