New Delhi-If you invest in the stock market then it is not easy to get good returns from here. If your investment is in the right place then multibagger returns can be achieved. If the investment decision is taken in haste, then many times you have to wait for a long time for positive returns. Investment experts always recommend value investing. His advice is that investors should do their homework well before investing.
In a report published in the Economic Times, famous investor Glen Greenberg has been quoted as saying that the focus should be on investing in such companies which are not expensive at present and achieve great growth in the coming tomorrow. They use a special technique for how any company will grow. He reduces the estimate of profit of a company by 20 percent. Despite this shortcoming, if they see this value stock, then they invest or give investment advice. He believes that with the help of this technique, the return on investment can come down, but there will be no loss.
Do homework first
Glenn Greenberg advises that before investing in any company, get complete information about it. Unless you have complete knowledge about that company and during this time investment confidence is not created, investment should be avoided. They always recommend investing in such companies whose business model is good and business is also good. If the business model is good then it should be seen whether it is a leader company in its field or not. Majority should be given to the leader company of any sector.
Focus on high returns, low risk
He recommends following the “two-inch putts” formula for investing. He says that invest in such companies where the return is high, but the risk is low. Always invest for the long term. Avoid such investments which will either give very good returns or there is a possibility of huge losses. Investing should not be viewed as speculation.
Greenberg says that if you have built a portfolio, then become a long-term investor. If you reinvest the returns as investment, your returns will prove to be multibagger in the long run. He says that choose a company whose shares are available at a low price and whose business model is futuristic. Invest in these companies first, then earn profit and keep investing that profit again. By doing this, you will get manifold return on investment in the long term.
Invest only if you have business understanding
He also says that invest only in such business about which you are aware. If you do not have an idea about the business, then do not become an investor. Looking at other investors, do not take entry in such business which is not known. Apart from this, use more common sense instead of computer for calculations. With this, you will be able to take the right decision regarding investment.
Don’t be greedy in the market
Apart from this, investors should never be hungry. Sometimes the hunger for higher returns overwhelms investors. It happens to most of the investors that they have got the desired returns but in the bull run they want more returns. Sometimes the market breaks down and they also suffer a lot. Investors should not forget that buy below intrinsic value and always carry a safety margin. With the help of this principle, heavy losses will be avoided.