Home
Account Login
Not Logged In
☰
  • Trade Now
  • About Us
    • Why Choose Us
    • About Kotak Securities
    • About Kotak Group
    • Service
    • Media
    • Careers
    • Current Openings
  • Product
    • Asset Classes
      • Tax Free Bonds
      • Gold ETF
      • Stock Lending & Borrowing (SLBM)
    • Trading Tools
      • Website
      • KEAT PRO X
      • Kotak Stock Trader
      • Call and Trade
    • Account Types
      • Demat Account
      • Private Client Group (PCG)
      • 2 in 1 Account
      • Trinity Account
      • NRI Account
      • Foreign Investors (QFI)
    • Value Added Features
      • Margin Intraday Square off (MIS)
      • Stock Basket (smallcase)
      • Margin Trading Facility
      • Super Multiple
      • BNST
      • Portfolio Tracker
      • Capital gain report
      • Use Stocks as Margin
      • Knowledge Bank
      • Refer and Earn
  • Pricing
  • Research
    • Live Research Calls
      • Fundamental Call
      • Technical Call
      • Derivatives Call
      • SIP Call
      • Top Monthly Picks
      • Pick of the Week
    • Kotak Research Centre
    • Latest Research Reports
      • Stock Recommendations
      • Research webinars
    • Sample Research Reports
  • Help
    • Contact Us
    • Get Your Account Statements
    • Open an account
    • Demos
    • Forms
  • More
    • Startup Engagement
    • Kotak University
    • Franchisee
Home » Articles » The Discipline of Investing

Articles

2014661830565536055253
How it helps?
  • Zero maintenance charges
  • Zero fees for demat account opening
  • Volume based brokerage
Reach Us
Learn the art of Investing

Read More >


  •     

    The Discipline of Investing

    Do you want to follow the footprints of successful investors? If yes, then, inculcate discipline in investing! Know how a disciplined investment can help you in wealth creation.


    Publish Date: March 18, 2019

    By: Sandhya Kannan, Head – Content

    Do you know the major difference between a successful and unsuccessful investor? Successful investors are disciplined! Their investment decisions are not driven by greed, fear, and emotions. They know how to react when the market turns volatile. Well, investment discipline isn’t easy. Despite knowing all the factors that can lead to losses, many investors react emotionally to market moods. Most times, investors don’t even follow the long-term investment plans. So, If you haven’t built a disciplined plan yet, here is your opportunity to start working towards it!

    Why Discipline in Investment is Needed?

    Many investors talk about having discipline in investing, but not all the investors follow it. Either a lack of knowledge or procrastination prevents us from inculcating discipline in investing.

    Many investors after starting their investment journey get excited when things work in their favour, and they hold on to their investment because the stocks react positively. But, why not have discipline at all times? Why not keep your investments in such a way that work for you at all seasons and all times. This is where discipline matters the most!

    Investment is just like life- it is a journey. If you want to go for a vacation, you don’t just get up and go one day. To get the most fun out of your vacation, you plan ahead and prepare accordingly. A planned journey makes it orderly, peaceful and happy. Same is true for your investments!

    Your investment will work for you only if you plan it well. The world-famous investor Warren Buffett once said that "The most important quality for an investor is temperament, not intellect." Buy-and-hold investors need to have a specific temperament, and they need to operate in a disciplined manner. They have to rebalance their portfolios periodically.

    Discipline in investing should be maintained irrespective of the market movements. You can't say, “This decline is so painful; I can’t put more money in stocks now.” You won’t be successful if you don’t stick to the discipline you have planned for your investments.

    Let's look at how financial planning differs with people in different life stages.

    Discipline Overpowers Emotions

    In the world of investing, emotions can be your enemy.

    • During bullish markets, it's greed and envy
    • During bearish markets, it's fear and panic

    Such heavy emotions can cause you to earn returns persistently below the returns of the assets you own. These can have outcomes via a rear view mirror, i.e., investors tend to buy more after a good performance and tend to sell low after a poor performance.

    Warren Buffet also says that "The most common cause of low prices is pessimism. We want to do business in such an environment, not because we like pessimism, but because we like the prices it produces.”

    Those with disciplined investing end-up making the most of all market cycles because their focus is to make profits, and they are not emotionally driven.

    Discipline- Long Term Investment

    One of the biggest mistakes investors make is changing their investment strategy at unexpected times. Don’t second-guess yourself; this may lead to high losses. In fact, to be a successful investor you need to follow some strategies consistently, and one of the most important ones is to have a long-term view!

    Many investors tend to buy high and sell low because of their short-term views; however, wealth creation requires a long-term view.

    If you are going to pull out of your investments within less than 5 years, then you are not giving sufficient time for your money to grow.

    Alternatively, if you invest for a time frame of 10 years, which is a long-term, you give your investments the time to perform well. In long-run, you can avoid the negative effects of short-term market volatility. You may choose to invest in high-risk investment options for the long term. Many people think that risky investment options like stocks and equities can be a place to earn quick money. This belief is totally wrong. Expecting quick gains from such options may lead to quick losses.

    A study conducted by J.P. Morgan Asset Management using data of the S&P 500's largest moves between 31, Dec 1993 and 31, Dec 2013 showed that staying invested for all 20 years would have given a return of 483% for investors of the broad-based index.

    It stated that missing 10 biggest moves up in these time spans would have cut your return to just 191%. Even the 30 best days in a 20-year period, would have given you returns less than 20%. So, the whole point here shows that staying invested in a disciplined way reduces your risk of missing out on the big gains.

    Check the 7 important points that cover the broad areas in which financial planning can be undertaken.

    Creating a disciplined investment plan

    Today, the life expectancy of people has increased. So, you need to create a plan that will cover you at various life stages. Hence, a disciplined investment approach will help you to achieve long-term financial needs without depending on others.

    A young person can allocate more funds to high-risk options like equity and can stay invested for 25-30 years. And then, he can slowly move to low-risk options that provide you capital protection.

    Options such as the Systematic Investment Plan, in both mutual funds and stocks, offer a disciplined investment style.

    If you look at the past 40 years of the economic cycle, there have been many ups and downs. Movements similar to those are expected in the upcoming years too. The best approach to overcome the effects of market volatility is to follow a disciplined long-term investing style.

    Smart Tips for Disciplined Investing

    • Balance your financial plan

      Balancing your portfolio is an important part of long-term investments. Your need might change every time, and to fulfil such diverse needs, you should keep updating and balancing your portfolio. But, make sure you stay invested until each goal gets fulfilled. This is how balancing plays an important role in your portfolio.

    • Diversify for a smoother ride

      Diversification is the key to balancing the risk in your portfolio. When you invest in various asset classes and instruments, you tend to earn optimum returns on investments with minimum risk. Suppose, if one asset in your portfolio fails to perform in a particular cycle, others in the portfolio will balance the risk. This means that the risk of your portfolio is not limited to just one asset.

    • Maintain this portfolio through all market conditions

      As you know, the markets keep changing, so you should always maintain roughly the same asset allocation that is suitable for all market conditions. This where rebalancing works. Rebalancing helps control portfolio allocation. So, make sure that you do annual rebalancing of your portfolio.

    • Keep your emotions out

      A true sportsman is emotionally strong. Investors tend to let emotions cloud their judgement when their assets don’t perform as per their expectations. But, this will only bring your confidence down. Fear and emotion are two bad traits that you need to keep out of trading.

      During a bullish market, investors hear stories of fabulous returns being made, which leads to buying shares of unknown companies. On the other hand, in a bearish phase, investors panic and sell their shares at rock-bottom prices. Such steps may lead to a loss. Therefore, once you plan to trade, make sure you keep your emotions out.

    • Don’t change the allocation because of recent market trends

      If you have invested for your long-term needs, stay focused. If you’re not willing to hold an asset for the next 10-15 years, then you shouldn’t own it now. When you invest for long-term, it doesn’t matter what’s going on in the markets today. In the long-run, your asset will give you good returns.

    • Avoid the herd mentality

      This is the most undisciplined way of investing. Many investors get highly influenced by other investors and tend to invest in the same stock. But, this strategy can backfire in the long run.

      So, the next time you hear about some stock doing well, go back, do your own research and then decide.

    • Monitor rigorously

      This is one of the most important parts of disciplined investing. We live in a world where any event can occur anytime and have an impact on the financial markets. Therefore, constant monitoring of your portfolio can keep you aware, and accordingly, you can make changes to your portfolio. You may take help of a financial planner In case you are not able to timely review your portfolio.

    • Conclusion

      Remember, all disciplined plans have actually worked. Since our childhood, we are told to follow discipline in our day to day life, but most of us don’t follow it. In the world of investment, if you want your money to shine in the future, start inculcating the habit of discipline. Make sure you follow a disciplined investment plan and stick to it!

      Happy investing!

      Also read:  

      • Exploring Careers in Stock Markets
      • 3 important ratios to use while analysing your portfolio
      • Exchange Trading Fund (ETFs)
      • Mutual Fund Research
      • Half a chocolate, double the joy

      Click here to go back










Stock Market Sectors :        A | B | C | D | E | F | G | H | I | J | L | M | N | O | P | R | S | T | V | W |

About Us

  • • Branch Locator
  • • About Kotak Securities
  • • Awards and Accolades
  • • About Kotak Group
  • • Technology
  • • Strong Research
  • • Customer Support Chat
  • • Brokerage Charges

Asset Classes

  • • Equity Trading
  • • Derivative Trading
  • • Mutual Fund Investment
  • • IPO
  • • Gold Funds
  • • Currency Derivatives
  • • Fixed Deposits & Tax Free Bonds
  • • Debentures

Derivatives Market

  • • Most Active Contracts
  • • Gainers
  • • Losers
  • • Top Volume Traded
  • • Top Value Traded
  • • Most Active Put
  • • Most Active Call
  • • Open Interest
  • • Highest in Premium
  • • Put Call Ratio

Investment Knowledge Bank

  • • Share Market Basics
  • • What is Demat Account
  • • What are Derivatives?
  • • What are Futures?
  • • What are Options?
  • • What are Mutual Funds?
  • • Basics of Financial Planning
  • • Calculators
  • • Videos
  • • Meaningful Minutes

Trading Tools & Research Reports

  • • KEAT PRO X
  • • Kotak Stock Trader APP
  • • Fastlane
  • • Xtralite
  • • Dealer assisted trading
  • • Call and Trade
  • • Investors Research
  • • Trader Research
  • • Mutual Fund Research
  • • Fundamental Analysis Reports
  • • Technical Analysis Reports
  • • Derivative Reports
  • • Currency Derivative Reports

Account Types & Value Added Services

  • • Demat Account
  • • 2 in 1 Account
  • • Trinity Account (3-in-1 Account)
  • • Linked Account
  • • NRI Account
  • • PMS
  • • Margin Trading
  • • BNST
  • • TradeSmart Store
  • • SMS Alerts
  • • AMO

Equity Market

  • • Share Market Live
  • • Gainer
  • • Loser
  • • Most Active Stocks
  • • Volume Buzzer
  • • 52Wk High
  • • 52Wk Low
  • • All Market News
  • • Bullion News
  • • Economy General
  • • Corporate Actions
  • • Other News
CUSTOMER CARE Chat with us
77389 88888WhatsApp Chat
(Add city STD code while calling from Mobile)

TIME:
Customer Service:- Mon to Fri – 9.00 AM TO 6.00 PM
Call and Trade:- Mon to Fri – 8.30 AM TO 5.30 PM

For Call & Trade, dial 080 4725 3255
Write to us at service.securities@kotak.com for Trading Account-related queries and ks.demat@kotak.com for Demat Account-related queries

Connect with us

No need to issue cheques by investors while subscribing to IPO. Just write the bank account number and sign in the application form to authorise your bank to make payment in case of allotment. No worries for refund as the money remains in investor's account.

KYC is one time exercise while dealing in securities markets - once KYC is done through a SEBI registered intermediary (broker, DP, Mutual Fund etc.), you need not undergo the same process again when you approach another intermediary. Attention Investors Prevent Unauthorized Transactions in your demat / trading account --> Update your Mobile Number/ email Id with your stock broker / Depository Participant. Receive information of your transactions directly from Exchanges on your mobile / email at the end of day and alerts on your registered mobile for all debits and other important transactions in your demat account directly from NSDL/ CDSL on the same day." - Issued in the interest of investors. Circular No.: NSDL/POLICY/2014/0094, NSE/INSP/27436, BSE - 20140901-21

Kindly note that as per NSE circulars nos: NSE/INVG/36333 dated November 17, 2017, NSE/INVG/37765 dated May 15.2018 and BSE circular nos: 20171117-18 dated November 17, 2017, 20180515-39 dated May 15.2018, trading in securities in which unsolicited messages are being circulated is restricted. The list of such stocks are available on the website of NSE & BSE. In case of any queries, request you to kindly get in touch with Customer Service on 18002099191/9292

Kotak securities Ltd. having composite licence no.CA0268 is a Corporate Agent of Kotak Mahindra Life Insurance Company Limited and Kotak Mahindra General Insurance Company Limited. We have taken reasonable measures to protect security and confidentiality of the Customer information.

The Stock Exchange, Mumbai is not in any manner answerable, responsible or liable to any person or persons for any acts of omission or commission, errors, mistakes and/or violation, actual or perceived, by us or our partners, agents, associates etc., of any of the Rules, Regulations, Bye-laws of the Stock Exchange, Mumbai, SEBI Act or any other laws in force from time to time.
The Stock Exchange, Mumbai is not answerable, responsible or liable for any information on this Website or for any services rendered by our employees, our servants, and us.

Please do not share your online trading password with anyone as this could weaken the security of your account and lead to unauthorized trades or losses. This cautionary note is as per Exchange circular dated 15th May, 2020.

Note: NSDL and CDSL have mapped Unique Client Codes (UCC) to demat accounts based on PAN, refer NSDL and CDSL circulars. Format for linking/delinking the UCC: NSDL: link | CDSL: link.

Clients are required to keep all their account related information up-to-date including details like email id, mobile number, address, bank details, demat details, income details etc. which will help the client to timely receive any information and to avail the various facilities relating to the Trading and Demat account. To update the details, client may get in touch with our designated customer service desk or approach the branch for assistance.

Investor Awareness regarding the revised guidelines on margin collection:-
Attention Investors :

1. Stock Brokers can accept securities as margin from clients only by way of pledge in the depository system w.e.f. September 1, 2020.
2. Update your mobile number & email Id with your stock broker/depository participant and receive OTP directly from depository on your email id and/or mobile number to create pledge.
3. Pay 20% upfront margin of the transaction value to trade in cash market segment.
4. Investors may please refer to the Exchange's Frequently Asked Questions (FAQs) issued vide circular reference NSE/INSP/45191 dated July 31, 2020, notice no. 20200731-7 dated July 31, 2020 and NSE/INSP/45534 dated August 31, 2020, notice no. 20200831-45 dated August 31, 2020 and other guidelines issued from time to time in this regard.
5. Check your Securities /MF/ Bonds in the consolidated account statement issued by NSDL/CDSL every month.
.......... Issued in the interest of Investors

Clients are hereby cautioned not to rely on unsolicited stock tips / investment advice circulated through bulk SMS, websites and social media platforms. Kindly exercise appropriate due diligence before dealing in the securities market.

Requirement of obtaining consent through OTP has been waived for off market transfer reason code “Implementation of Government / Regulatory Direction / Orders” Consent through OTP would continue to be required for all other reasons for any off-market transfers. Refer NSDL circular.

Covid-19 impact to clients:-
1. Applicable to clients on whose email id contract notes and other statements get bounced or who have opted for Physical contract notes/ other statements or Digital and Physical contract notes/ other statements :Due to the nationwide lockdown, we are unable send physical contract notes and other statements. To view them, log into www.kotaksecurities.com
2. Kindly update your email id with us to receive contract notes/various statements electronically to avoid any further inconvenience.
3. We are unable to issue the running account settlement payouts through cheque due to the lockdown. We request you to update your Bank account details to facilitate direct transfer to your linked bank account. You may approach our designated customer service desk or your branch to know the Bank details updation procedure.
4. Exchange advisory: Investors are advised to exercise caution while taking investment decisions in these unpredictable times. Clients are also encouraged to keep track of the underlying physical as well as international commodity markets. Clients are advised to undertake transactions after understanding the nature of the contractual relationship into which they are entering and the extent of its exposure to risk. Clients are further advised to follow sound risk management practices and not to be carried away by unfounded rumors, tips etc.

Filling complaints on SCORES- Easy & Quick
a. Register on SCORES portal  |  b. Mandatory details for filling complaints on SCORES  i. Name, PAN, Address, Mobile Number, E-mail ID  |  c. Benefits:  i. Effective Communication  ii. Speedy redressal of the grievances

Charges for Other Services  |  Disclaimer  |  Sitemap  |  Privacy & Security  |  256 Bit Encryption  |  BSE  |  NSE  |  MSE  |  MCX  |  SEBI  |  SCORES  |  Anti Money Laundering Measures  |  Important Policies  |  Dos & Donts  |  National Pension System  |  List of GST Registration Number

© 2005 Kotak Securities Limited.

Registered Office: 27 BKC, C 27, G Block, Bandra Kurla Complex, Bandra (E), Mumbai 400051. Telephone No.: +22 43360000, Fax No.: +22 67132430.
Correspondence Address: Infinity IT Park, Bldg. No 21, Opp. Film City Road, A K Vaidya Marg, Malad (East), Mumbai 400097. Telephone No: 42856825.

CIN: U99999MH1994PLC134051. SEBI Registration No: INZ000200137(Member of NSE, BSE, MSE, MCX & NCDEX), AMFI ARN 0164, PMS INP000000258 and Research Analyst INH000000586.

NSDL/CDSL: IN-DP-NSDL-23-97

New To share Market?

Open Your Account Today!

New Customer?

Hurry! Sign up for Free Intraday Trading now

BROKERAGE FREE

on intraday trades

AVAIL THE OFFER NOW

NO ACCOUNT OPENING CHARGES



Submit

Please Note

That by submitting the above mentioned details, you are authorising Kotak Securities & its sub-brokers & agents to call you and send promotional communication even though you may be registered under DNC.

Open An Account