Wednesday, April 2, 2008

Average your loss in return

Many people who are investing in secondary market make loss than profit because they forget to make average of their loss. First of all we need to learn how to average the loss. For example, if you invested one fifty thousand rupees and bought an 'x' company shares for 500rupees/share then you will have 100 shares. If market crashes and your stock comes to rupees300 then your value comes to 30000rupees at this point you need to make average of your loss (i.e) make another investment when this stock comes nearby 350 or 400 rupees likewise and buy same quantity in this case 100shares. Now when the stock comes back to your previous value (i.e) 500rupees sell all your shares and you can book 10000rupees profit.

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