I get to see a lot of questions in website Q&A, forums, mails in the lines of..."I have invested Rs X in Y MF/ Z shares. is it a good investment??".
The immediate answer that comes to me is "Why did you invest if you were not aware of the consequences??". It is very important to understand where you are investing your money. At least a basic study or understanding is essential before you invest. There is no point going around for reassurance after you make the investment.
With the markets opening giving great returns in 2007 and IPOs also giving decent returns, there is mad rush for making 'Quick money' from the stock markets . People throw in their money without even thinking twice and blame stock markets on a dooms day.
So, understanding where your money goes and understanding the risk associated with your investment is very important before you throw your money in.
One more important thing is understanding the difference between investing and trading. Some people ask.." I have Rs X to spare for 2 months..which stock/ equity MF can I "INVEST" in??...
It's very important to understand that betting in your money for two months in equity is nothing less than gambling.
So always "Understand your investment"and enter for a "Long time horizon" to reap the benefits of stock markets.