1. We should not have undue fancy and attachment to particular shares since that may lead to loosing of profit for not having disposed of at the opportune time.

2.  Do not put your whole investment in selective sector. There are various sectors like cement, sugar, steel, pharma, power, communications, etc. We shall invest in various sectors and spread our risk, keeping in mind the favoured sector at the time of investment and make the maximum investment in that sector for a short period.

3. At present, Information Technology and Communications sector are the most favoured ones. In I.T. Sector, Companies like HCL, TCS,  Wipro, deserve our attention.

4. At present, it is desirable to stay away from investing in oil companies such as HPCL,IOC, BPL, and ONGC since they are facing problems of costlier raw materials and increased costs. But at the same time, companies like Reliance Petroleum, Reliance Energy etc. are worth investments.

Let us go through the following points before choosing to invest in shares.

1. Before choosing to invest, let us decide as to whether we would like to hold the investment in shares for short term, medium term or long term. Normally short term is for a period of two to three months, medium term is for a period of six months to twelve months and long term is for a period of one year and above.

2. Let us not invest in high priced shares since they are volatile in nature and we cannot bear the risk of high fluctuations. If we go for small value shares, we can invest in large quantity and even if there is a small increase in its value, we can offload immediately and book profit. Alternatively, we can partially book profit if the shares are worth holding.