Its been 4 years since I bought my first ever stock in the market. The Indian market has been in a phenomenal bull run since. In between it has seen quite a few bear phases too. Naturally as an investor I have learn't a few things. I therefore decided its time for publishing a few survival tips for a first generation novice investor like me.
First what does survival really mean?
As a dummy with the market my known modes of investment are at best fixed interest income instruments. These include bank deposits, saving certificates, provident fund, pension funds. Thus my investments can be expected to grow about 8 % annually as per current fixed deposit interest rates. This of course is virtually zero risk. Thus this marks the benchmark for my expectation of returns from any investment. With this background I consider that one has survived the market if over the long term (per current Indian rules a period greater than a year is considered long term for investments in stock market) one has achieved a return better than the benchmark mentioned above. Thus anything significantly better than 8 % and one would have more than just survived. In such a case consider comparing your returns to a more realistic benchmark (e.g. Market Indices like Sensex, nifty ). That comparison is of course not for the novice so for the posts in this series I'll stick to the benchmark defined before.
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