3. You Should Not Follow the Herd

Don’t follow the crowd without an understanding of the market. Having a herd mentality can escort you to financial blunders. If you are a passive investor who has purchased investments with the intention of long-term appreciation and limited maintenance, then sticking to investment plans, indexes and other basis of the buy-and hold portfolio is a perfectly acceptable practice. But when you switch from passive investment to an active portfolio, then continuing with your couch potato strategy can be dangerous.

4. You Should Be Humble

When the Bombay Stock Exchange (BSE) or the National Stock Exchange (NSE) markets opens in green, you should not immediately start buying stocks with the hope of its better performance in the future. Sometimes, especially during a bull market, gains are not dictated by investor trading activities but by how much the market have. You must study the market first and try to find the reasons for the market rise. At this time don’t allow yourself to become overconfident. As overconfidence often leads to overtrading, taking unnecessary risks and eventual losses when the bull turns bear.

Also read: 5 Worst Ways to Borrow Money