Investing in stocks: Few key things to know for long-term buy and hold investors

?? Picking Individual Stocks Vs Investing in index funds - 80 percent of portfolios which are actively managed (i.e. whose managers trade in and out of positions) don't beat the index( like the S&P 500). Most people tend to ignore the above and try to beat the market for themselves.

?? Research:- If you don't have time to research stocks for at least 15-20 hours a week then it suffices to say that you probably should not be dabbling in picking out individual stocks and are far better of being invested in an index.

?? Circle of Competence:- Knowing and Staying within the circle of competence is extremely important i.e buy businesses that lie within the realm of your skills and experience. For e.g. one must not go and pick up a genetics stock just because the sector is in the news unless you understand business in the genomics space.

?? Stock Price:- Monitoring the stock price is not investing.?The price has baked into it the collective opinion of the market at any point in time. However, this may or may not be reflective of the fundamentals of the underlying business.

?? Time Horizon:- Keeping a long-term view and having the stomach to hold through upturns and downturns is super important. Everyone is a long-term investor till they see red in their portfolios.

?? Decision Making: - Most folks do loads of research on the next item they are going to buy for themselves while going ahead and picking out the next stock that they read about in some article or some tip they got from a friend. In investing, knee-jerk reactions while both buying and selling generally tend to result in unfavorable outcomes.

?? Conviction:- You can borrow a stock tip from a friend/article but not the conviction they had behind their purchase/suggestion. Conviction is best formed on your own and backed up by underlying research and insights.

?? Reduce Fees and Commissions:- Fees are what you pay professional money managers to invest money on your behalf. Commissions are what you pay to funds like index funds or mutual funds. Over time these can really add up and hurt the overall return of your portfolio. Buying and holding quality businesses for long periods of time and not racking up transaction costs due to trading is a good strategy from both a tax-management and fees perspective.