Rule 1: Don’t buy unlisted shares

Three are over 20,000 public limited companies in India, of which only around 7,000 listed on the country’s various stock exchange. The first rule of profitable share investment is to confine your buying to these 7,000 listed companies only.

Stock exchanges do not permit trading in unlisted shares, nor do they permit their registered members, i.e. brokers to deal in unlisted shares. You won’t get the protection of the stock exchange authorities; nor will able to use the services of your stockbroker in handling such transactions. More over, in the absence of stock exchange quotations you wont be able to assess what the market price of an unlisted share should be. All these factors create complication and risk, which you are should avoid investing in shares of unlisted companies.

How does one know whether a share is listed or not ? It’s simple; all shares whose prices are quoted in daily newspaper are listed shares. Unlisted shares are never quoted. Therefore, the fact that a share is quoted means that it must be listed. This is the easiest and surest way of finding out whether a particular share is listed or not.

Investment is all about, deployment of your savings with the intention of preserving or increasing their value, this deployment can be done by using your savings to buy land, residential property, commercial property, gold jewelery, works of art, fixed deposits in banks and companies, shares, bonds, in fact, anything whose value is likely to either remain constant or appreciate with time.