However careful you are, in the equity markets there is always the possibility of making a mistake and being stuck with a wrong stock. And it is in times like these – when events are awaited and all kinds of narratives are floating in the market – that one ends up making the wrong decision. The much-awaited global event is Donald Trump’s second term as US president that may well spark some change on the global macro and trade fronts. So, as an investor, remember the two cardinal rules: One, be bullish, but be selective. And two, focus on managing risks – not only in terms of buying stocks, but also selling them in a hurry. The only way to reduce the chance of getting stuck with a wrong stock is to do your homework. Know your stock, rather than constantly checking if the market is correcting.
