DeepWealth: ">Investment Axioms
Some axioms based on several excellent books on the vast and fascinating subject of stock market investment like 'One Up the Wall Street'; 'Beating the Street'; both by Peter Lynch; 'Zulu Principle' by Jim Slater; 'The Warren Buffet Way'; to name only a few of them.
Where there is profit, there is always risk. Greater the opportunity of profit, greater the possibility of loss:
There is a close direct relationship between the risk and the reward. Higher the reward, greater the risk. Though this is fairly simple, it is always observed in breach.
Gentlemen who prefer BONDS, don't know what they are missing. On Bonds, there is no return ON our money; there is only return OF our money:
Bonds being Debt instruments unlike equity, yield only fixed return and with inflation and income tax factored in, there is often no return at all.
Equity Investment is 'risk' investment:
Investing in equity shares of companies is risk related because returns are linked to the company's profits unlike investing in bank deposits or bonds or debentures where the returns are fixed and accrue to investors regardless of the company's profits.
Stock market behaviour is unpredictable:
Stock market behaviour is dependent on human behaviour and since times immemorial, it has been established that human behaviour can never be predicted with any reasonable accuracy; and hence we have fluctuations in prices of commodities, things and stocks based on greed, emotions, hopes, fantasies, fear and dreams resulting in opportunities of making money out of such fluctuations!
ot all common stocks are common:
Though equity shares as an investment class is one, each company has a distinc"