7 Investment wisdom from Rakesh Jhunjhunwala

Rakesh Jhunjhunwala, the Big Bull of Dalal Street, who became one of India's biggest stock market investors to date, died at 62 in Mumbai. The stock market veteran often called 'Warren Buffett of India', was suffering from diabetes and kidney-related ailments.

According to Forbes, Rakesh Jhunjhunwala had a net worth of around $5.5 billion. An ace investor, Rakesh Jhunjhunwala started investing at an early age and has dominated the Indian stock markets for decades. 

In his time, Jhunjhunwala shared many words of wisdom. Below are 7 Investment wisdom from Rakesh Jhunjhunwala,

1. Continuous learning is the key

You cannot make money on borrowed knowledge. If you want to make money learn the skills needed for it. Study fundamentals of business and asset/stock before investing in it. Hastily taken decisions always result in heavy losses. Take your own time before putting money in any stock.

2. Overdiversification will not save you

These days, many investors invest in lots of stocks for diversification. It is not possible to study and monitor a huge portfolio of stocks. Choose selected stocks or asset classes for investment which has real potential to grow which you can monitor and stay invested for the long term. 

3. Patience is important in stock market

You should give your investment enough time to grow because the stock market rewards ‘patient’ investors who invest for the long term. The power of compounding will need time to play its role. You cannot get rich in a short period of time.

4. Learn from your mistakes

No matter how brilliant you are in planning your investment and asset allocation; there will be occasions when you would end up picking the wrong asset or stock! 

Even if you don't have a well-developed risk management system, the basic principle is no creditor should ever call you asking for his money, and if he does, you should be able to pay him immediately. Prepare for losses, losses are part of a stock market investor's life. Learn from your investment mistakes.

5. Go against the tide

Buy when others are selling and sell when others are buying. Don't go with market momentum and panic when the market is falling. Take benefit of low prices when the market is down and buy more. Keep your emotions aside while investing. Emotional decisions in investment are a sure way to make a loss in stock markets.

6. Don't invest based on tips

Never invest at unreasonable valuations. Never run for companies that are in limelight. Investing in some asset class or stock based on tips or media hype will take you on the path of losing your hard-earned money.

7. Risk is an essential part of investing

Stock markets are full of risk but if you don't take the risk, you will not get anything. Everyone has a different risk appetite & investors should consider it while investing.

The legend is no more in us but his wisdom will guide us through our investment journey always in the future.