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The power of don't

By not doing these 10 things, you can seriously enhance your chances of success in the stock market

The power of don't

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How can you ensure that you are successful in life? There are two ways to think about it. The first is to figure out all the things you ought to do to be on the right track. The second is to stay away from all those that will come in the way of your goal.

How can you use the second method to profit in your personal life? Say, you want to lose weight. There are things you need to do, such as exercising, going to the gym and walking, and things that will keep you from achieving your goal (occasionally gorging on junk foods will derail you, believe me). Recognising what not to do and staying away from those things are as essential to achieving your goals as doing what you should.

So how do you ensure you are successful in life? Make a list of all the things that you should not do and stick to not doing them. Some of the obvious ones are smoking, doing drugs, frittering away all your savings on impulsive online buying (guilty, again), living off credit-card debt and, importantly, as one sage put it, "avoid evil, particularly if they're attractive members of the opposite sex."

Figure out things you should avoid in life and you should do well. The same principle applies to investing. Avoid the major pitfalls and you should be doing fine.

So, we bring to you a checklist of how not to invest. While you can find a number of resources on how to invest, very rarely will you come across a guide that will warn you of the mistakes other investors made and paid dearly for. Learn from their mistakes; that's way cheaper.

Here you can read about the other articles in this series:

  1. Don't pay attention to hot stock tips
  2. Don't chase market whims and fads
  3. Don't buy stocks without understanding the underlying business
  4. Don't buy stocks that have no competitive advantage
  5. Don't buy companies that sell nonessential products or services
  6. Don't ignore profit margins and returns on capital
  7. Don't try to predict the next multibagger
  8. Don't forget to check the valuations
  9. Don't lose patience
  10. Don't buy companies that offer no enduring products