7 mistakes to avoid this Mahurat Trading

Want to invite Goddess Lakshmi home this Diwali? Then avoid these mistakes that stock investors often make. This can ensure your Muhurat Trading is a happy one.

Don’t copy othersIt’s important to ask for stock-related advice. You need all the help you want. But remember, it’s only guidance. Do not copy the entire strategy. Apply the strategy to your investment goals and see if it fits. In the case of stock recommendations, see if the investment duration matches. Also, check the risk appetite. Only then should you go ahead.

#1

Don’t be one in the herdLet’s say you read about a successful investor buying XYZ stock. Or saw people starting to buy stocks of a particular sector or company. Re-consider before buying it for yourself. You may not really understand the business. Or you may have missed the right price. In this case, it’s better to wait and re-evaluate. You could potentially get caught into a stock bubble.

#2

Avoid sentimentalityMany car owners hold on to their first car for years. That car, even after it stops working, has sentimental value. Don’t do this with your stocks. It may have been your first stock; your most favorite one, or the one that surprised you. Analyze it objectively. If it’s done its duty, it’s time to sell.

#3

Don’t anchorThis one comes from the pages of Behavioral finance. Let’s say you come across a particular sectoral trend. That particular sector is not doing well. Not every company may be suffering. Plus, some companies may have the bandwidth to survive. So don’t sell all the stocks of the sector. You may end up giving off the market leader in that sector too.

#4

Don’t ignore facts & probabilityStock charts can give a great deal of information about the trend. But it needs to be a scientific study. Otherwise, you can look at the short-term trends and make wrong forecasts. Base your judgement on real ‘facts’ and ‘probabilities’. This can help you make the right decisions and pick the correct stocks.

#5

Don’t run away from volatilityIf you find yourself looking at fluctuating prices, don’t worry. Volatility is not the enemy. You have picked the right stock after lots of research. Trust this research and analysis. In the long-run, this volatility barely matters.

#6

#7

Don’t give in to the panicDid your stock suddenly fall 4%? Do not panic. It’s not time to sell. It’s time to research and analyze the factors affecting your stock. Look at the news and developments. Check if they have harsh long-term consequences. Most probably, the fall could have been a broad-market movement. In such a case, it’s better to buy more cheaply or wait for a bull-trend.

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