Investment mistakes you should avoid

Investments in stock markets come with a fair share of risks and rewards. Although there’s no guaranteed formula to ensure good returns, it is important investors do not make mistakes that may lead to heavy losses.

Money9 Helpline hosted Rachit Chawla, CEO of Finway FSC to resolve queries related to investments and mistakes to avoid. Edited excerpts

Nirupam Mondal: I am investing in ICICI Pru Bluechip through SIP for 15 years (32% of my equity portfolio). Should I go for an index fund, Nifty 50 (16%), or Nifty next 50 (16%)?

Chawla: Nifty 50 index fund has better efficiency. This is because its cost is negligible because it is an automated fund. It has around 0.4% of the cost per annum. Moreover, the index comprises the top 50 companies in India, so e assured that your capital is protected for a longer period of time. In my own portfolio, I have invested a good share of percent in the Nifty 50 index.

Nikhil: Recently I have started intraday trading, what are the things I must know?

Chawla: Intraday trading has high risk and high reward. You need to understand the risk first. Out of 100% of your capital, you should invest in only 5 % capital as of now. Start this as training. This is because the volatility is higher, stock losses chances are higher. So factually check if you are able to earn on this, and then gradually you can raise corpus. zyaada hai stock losses ke chances higher, factually check kya earn kr pa rahein then increase corpus.