How to Avoid Loss and Earn Consistently in the Stock Market: An Easy-To-Understand and Practical Guide for Every Investor

by Prasenjit Paul

During bull-run any investor can do well, but what separates the intelligent investors from the rest is the ability to minimize loss during market meltdown. Retail investors tend to go for “loan against shares” during bull-run. After 1-2 years of good return, you start believing that you have mastered the game and then market will teach you a lesson. Leveraged position can even create bankrupt situation during market fall. So it is always better for retail investors to avoid the same.

So, 10% gross profit is originally 6.5% net gain where as 10% loss is originally 12% loss. Do you calculate net profit and loss in such a way?

Brokers, stock exchange and government – they can only earn consistently from trading. Every time you trade you need to pay all of them. They don’t bother whether you are gaining or losing. I hope now the reason is clear why your broker, media and several websites always encourage you to trade frequently.

Before purchasing cars, expensive mobiles or television, we undergo rigorous research. I still remember, before purchasing my first car I had spent minimum 30-40 hours on the internet over 3 months, 3 times showroom visit and then continuous monitoring of car price trend. After that, I took a test drive with another friend, consulted with my family members and then purchased the car. While purchasing a stock do you conduct such rigorous research? Not only car, just consider your last purchase of any expensive electronic gadget. All of us try to collect maximum data from our friends, the internet, and other sources and then take our decision accordingly. Similarly, do you spend a fraction of that time before equity investment? If investors can dedicate the same amount of time before purchasing a stock, then I would not have considered writing this book!