Do not Chase a Hot Tip
Regardless of the source, never accept a stock tip as valid. Always do your own analysis on a company before investing your hard-earned money. Tips do sometimes pan out, depending upon the reliability of the source, but long-term success demands deep-dive research.
Pick a Strategy and Stick with It
There are many ways to pick stocks, and it is important to stick with a single philosophy. Vacillating between different approaches effectively makes you a market timer, which is dangerous territory.
Focus on the Future and Keep a Long-Term Perspective
Investing requires making informed decisions based on things that have yet to happen. Past data can indicate things to come as the cycle is believed to repeat but that's not guaranteed. While large short-term profits can often entice market neophytes, long-term investing is essential to greater success.
Avoid Penny Stocks
Some wrongly believe that there is less to lose with low-priced stocks. However, no matter the stock price (be it Rs. 5 or Rs. 500), it can tank to Rs. 0, and you lose 100% of your initial investment, so all stocks carry similar downside risk. In fact, penny stocks are likely riskier than higher-priced stocks, because they tend to be less regulated and often have more volatility.