It’s time to bust some Myths!!

Dear Readers,

As we complete our series of behavioral Stock Shastra, let’s take a quick recap. In the first series, we started by showing you the right way to invest in stocks. In the 13 Stock Shastras, we covered a complete methodology, which is critical to investing in stocks the right way. But, knowledge in itself is not useful unless it is put into action. And so we proceeded to show you how to act in the right way.

In the next series of 6 Behavioral Stock Shastras, we talked about the mental traps you are likely to encounter while investing and guided you on how to overcome these.

Equipped with all this, we are sure you now feel confident about investing in the stock markets and justly so! So, is it time for you to take the plunge in the stock markets? Infact, that’s what all the ‘experts’ in the media seem to be saying. With the Sensex close to touching 20,000, ‘retail investors’ like us are being tempted, more than ever, to jump on the bandwagon! What we need to realize is that when it comes to the stock markets, we can hear a lot of unrealistic and outright wrong beliefs and views i.e. stock market myths. Following these myths blindly can be dangerous and lead you to make incorrect investment decisions. And hence, our next series of Stock Shastras is about busting these myths.

So, what are the common stock market myths?

‘Stocks with low P/E are cheap!’ – We’re sure you’ve heard this one many times before. But is it really true? Not always! And what about ‘Stocks with low P/BV are cheap’? Like the previous one, this may also not hold true always and we might make the wrong decision by just following this.

Hence, it is important that we know the entire story behind such myths, so as not to base our decisions solely on them. Wondering why so much ado about these myths? Find out in our next series of Stock Shastras.

By the end of this series, you will be able to spot /identify these myths and not get carried away by them. This, in turn, will help you make better investment decisions and thus avoid losing money in the stock market.

So, see you next week on Tuesday with our first Stock Shastra on “Stock Investing Myths”

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