Top 30 Valuable Lessons from Stocks to Riches 

by Parag Parikh

Mr. Parag believed in long-term wealth compounding and value investing and delivered above-average returns over many years in his PMS service as well as through his mutual fund business.

In the book Stocks to Riches, he has discussed in detail how bias influences us to make decisions in different situations which causes us to harm our financial well-being.

Here are the top 30 valuable lessons from stocks to riches

1. The reality is that human beings make decisions not only with their minds but also with their hearts.

2. There is no foolproof solution to avoid the loss but there are ways to minimize the loss.

3. the right time to invest is when others are scared.

4. Investors tend to take their profits very early.

5. Investors take more risks when threatened with a loss.

6. Investors tend to lose their balance when confronted with a loss and become more daring and venturesome.

7. Investors tend to hold on to losers and sell winners.

8. The best way to avoid the pain of losing is to avoid losing money.

9. One needs to not only diversify within asset classes but also across different assets.

10. Fear and greed are two sides of the same coin.

11. Past performance is no guarantee for future performance

12. Our emotions are subject to change rapidly and this affects our behavior and decision-making

13. Investors need to be aware of these small details when they invest in mutual funds.

14. Deciding not to make a decision is also a decision.

15. The greater the choice, the harder the decision.

16. Greed and fear are a part of the market flow.

17. Don’t get married to your stocks.

18. Understand that there is no free lunch.

19. When we have to take decisions we worry about the consequences. Before running away, ask yourself what is the worst that can happen if you make the decision.

20. Beauty may be in the eyes of the beholder but the value is often in the eyes of the buyer.

21. Many investors ask whether they can build an investment portfolio with small capital. The answer is to grow big you need to start small and stay invested.

22. Our emotions are subject to change rapidly and this affects our behavior and decision-making

23. Modern man drives a mortgaged car over a bond financial highway on credit card gas

24. It is the fear, not passion that drives our decision-making.

25. If you have a passion for anything you will excel as passion helps you to think positively. But when you are gripped by fear you always play it safe.

26. People believe that money can solve all their problems but that idea is an illusion.

27. To become rich you must have a passion for money. Making money is a game and you must enjoy playing it. It is tough but worth the trouble.

28. Past performance is no guarantee for future performance

29. The longer you hold the better for you.

30. We create high net worth individuals, we do not chase them.