It's important not to get too greedy and to be able to let go after one has made money; the trouble with most investors is that they are reluctant to sell when prices are rising.

Don't wait for returns of 60 and 70 per cent; cash out if you've made even 40 per cent because no other asset class gives you that kind of return, and that too tax free — that's if you've held the shares for more than a year.

For those who do not have the time to keep track of stocks, the best way to go about it is to invest in mutual funds through what is called a systematic investment plan or SIP.

Essentially, the idea is to invest a small amount every month so that it doesn't strain one's finances and one gets a good price for what one's buying.

There are all kinds of mutual funds — index funds that mimic the indices, large-cap funds which invest in bigger companies, mid-cap funds that take bets on smaller firms, sector funds that look at options in different spaces such as infrastructure or pharmaceuticals.

Image: A man walks past a brokerage house with an advertisement for a mutual fund. | Photograph: Indranil Mukherjee/AFP/Getty Images

Also read: What the world's big guns say about the meltdown

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