Investment is an art as well as science. It is neither a pure science (else all Chartered Accountants would have been Billionares), nor a pure art. 

Never borrow to invest in stock market. Otherwise debt will guide your buying/selling decisions.

Not to head to hearsays or rumors. Nobody ever has consistently made money with this technique. As Warren Buffett says "With enough inside information and a million dollars you can go broke in a year"

Every stock you sell should be a good investment bet. You found a better bet and the reason to sell.

Never apply any thumb rules to book profit. Else you may miss the multibaggers. Rather apply rules in cutting losses. Unfortunately the reverse is true - Most of the investors earn small profits from number of stocks and hold on to positions with huge losses.

Technical (Chart) Analysis does works, not always.

Repeating a mistake in Stock Market could be disastrous.

What matters the most is VALUE. It is the price you pay for the value you get. Hold the stock as long as the perceived Value is greater than the ruling stock price.

Hold decision can be self deceptive, most of the times. Hold the stock only if you are ready to buy more of it. Not, just for the reason it is hovering below your purchase price and you do not want to book loss. 

Remember : Stock investment is not a rocket science, there is no quick and easy formula of multiplying your wealth.

Control your emotions – Majority of investors are often ruled and ruined by emotions. Follow your head, not your heart.

Learn to respect Mr. Market who is always ready to offer 'Buy' as well as 'Sell' quotes. Never try to stand against Mr. Market, better to avoid it rather than facing it head-on.  

Consider cash as good as a stock in your portfolio. Increase its weighatge in your portfolio with increase in indices and vice versa. 

Successful investing lies in finding out the next multibagger stock and not in predicting the market on Day to Day or Hour to Hour basis. Technical Chartists and Investment Gurus appearing on Television and writing in media are always busy in predicting the next resistance or support levels on day-today basis and swiftly they change their decisions. Do you know the success rate of their prediction - 50%, same as flipping a coin!

If you can identify the stocks to acquire, short term investors will help you in buying the stocks cheap and give you an opportunity to sell dearly. Short term investor always operates on short term trends and often displays irrationality. While long term investor keeps waiting patiently for the irrational valuations to make a killing.

What is required to succeed in share market?

"The list of qualities (an investor ought to have) include patience, self-reliance, common sense, a tolerance for pain, open-mindedness, detachment, persistence, humility, flexibility, a willingness to do independent research, an equal willingness to admit mistakes, and the ability to ignore general panic."  - Peter Lynch

How to manage your portfolio Smartly

Designing and managing a stock protfolio is not a one time activity. Apart from incorporating Risk-Return profile, you also need to maintain  proper diversification in terms of the number of stocks, Industry exposure, individual stock exposure and last but not the least - CASH. 

Stock Portfolio can be designed and maintained in different manners by different investors based on risk appetite and expected returns. Our research team has framed below mentioned rules for those expecting decent returns for a moderate risk.

No. of Stocks : Statistically it has been proved that, one need to have not less than 17 stocks from diverified industries to mitigate the stock specific risks. On the upside you can hold any number of stocks as long as you are able to track them regularly.

Stock Weightage : No single stock shall have weightege of more than 8% of total portfolio value.

Industry Weightage : No single industry shall have weightage of more than 15% in your portfolio.

Cash : Consider Cash as good as a stock in your portfolio. Try to reduce the cash component, when the market goes up too fast. Similarly cash should be used to bring down the cost of acquisition of existing stocks in case the market skids.

Shock absorbers: About 40-60% of your holding shall consists of stocks with very sound fundamentals and growing no less than 20% CAGR since last five years. These stocks have the capability to withstand the crashes to a great extent.

Potential Multibaggers : About 40-60% of your holding shall comprise of stocks which have high visibility (strong order book) and which have logged at least 30% CAGR during last three years.

Dark Horse : About 10-25% of your holding shall be in company stocks which are going un-noticed on the bourses and will soon be at the center stage.

Forget 'Hold' : Remember, there is as such no HOLD decision. Every stock in your portfolio should be a good BUY. Do not keep any stock merely for the reason, "..it has fallen below my buying price and I do not want to book loss".

Regular Reviews : Over a period of time the stock specific weightage changes with changing prices. It is advisable to review your portfolio at least once in a year. 

Some battles have to be lost, to win the war : One should not expect each and every trade in stock investment to be success. Failures are bound to be there. At times it is wiser to sell a stock for broader interest of the portfolio.