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The stock market has been the talk of the town for the last few months. The Sensex shot past the 20000 mark and every man and his neighbour wanted to make a killing in the stock market. In such a context, I found an article in the Economic Times very useful.

As they say, the first rule to investing is ‘Don’t lose money’. The second rule to investing is ‘Don’t forget rule no. 1’! It is essential to stick to these rules when it comes to investing, in order to avoid the possibility of capital erosion.

To apply these rules successfully and to create wealth through equity investing, Raamdeo Agrawal, Director & Co-founder, Motilal Oswal Financial Services identifies a 5-step guide to locating a ‘wealth creator’ , Here are the 5 parameters that you must evaluate:-

1. Assess the entry barriers created by a company
2. Management should be competent and passionate
3. Management should have integrity
4. Buy low
5. Have patience

Read the article to understand why these tips can make you a wise and successful investor.