If i ask Retail Investors, How many of you lost money in the stock market?. I can guarantee that out of ten retail investors; eight will say YES. In my opinion, Rest Two are lucky enough to invest in RIGHT STOCKS :). The experience of my readers is quite shocking sometimes. Here i would like to clarify that i am counting Retail Investors who generated returns less that FD returns as a loss to the investor. For simplicity purpose, i will quote the examples of Mutual Funds that is perceived to be safest by the Retail Investors. During one of the discussion, i cited the example of few stocks, and ... Read More
Investment in 2016 – 5 Factors that will decide the Returns
Investment in 2016 is the most trending query in personal finance space. It is a million dollar question. There is no better way to start the year with factors that will influence returns in 2016. The year 2015 was a roller coaster ride for investors. It began on a good note but ended on a bitter note. Overall, investors lost the money except traditional investors who invested in fixed income or small savings scheme. In my post, Equity Investor - 5 Biggest Mistakes I should have avoided i discussed my mistakes. As i mentioned that going forward, i will change my investment strategy. I will ... Read More
Equity Investor – 5 Biggest Mistakes I should Have Avoided
Being an Equity Investor is the riskiest job in this world. This thought came to my mind while going through a post on riskiest jobs in the world :). Jokes apart, i was forced to think some of the biggest mistakes i made in past as an equity investor. I can pat my back for double-digit returns, but if i would have avoided mistakes as an Equity Investor, then i could have aimed for doubling the returns. Life is full of ifs and buts. No one intentionally takes wrong decisions in life. At the time of decision making, the decision appears right and profitable only. Every mistake is a learning ... Read More
Risk Free Equity Investment – Whether it is Possible or Not
Risk Free Equity Investment must be sounding bizarre statement. You must be thinking Risk Free Equity Investment is not possible at all. After recent turmoil in the stock market, i was wondering whether it is possible to invest in equity with ZERO risk. The answer is YES. Next thought in your mind is what's the big deal; i can invest in Capital Protection Funds. I agree, but here we are discussing direct equity exposure. As i shared in my post on capital protection funds that approach of a fund manager is bit conservative. Secondly, after recent developments debt mutual funds can deliver ... Read More
Threshold Rebalancing – Hegde your RISK
Threshold Rebalancing is one of the most effective techniques to hedge risk. In layman terms, it is portfolio rebalancing. The key reason retail investors don't make money in India is that they don't rebalance the portfolio. There are two ways to rebalance the portfolio i.e. calendar rebalancing and threshold rebalancing. The concept of calendar rebalancing is similar to value investing. On the other hand, threshold rebalancing is linked to deviation from fixed target. Let me share a simple example. For simplicity purpose, i assume that my asset allocation is divided only between Equity and ... Read More
Asset Allocation – What to do now?
Asset Allocation is the biggest headache for any investor. The financial planners suggest a model asset allocation. There is a famous saying that one size does not fit all. The concept of model asset allocation is vague and farce. It does not take into account all the factors that influence investment risk. A bad mix of asset allocation may destroy your wealth at a faster rate. An asset allocation mix of the investors of the same age and income level can be entirely different. In past, i have observed extreme portfolio allocations. The risk-free investors are heavily invested in traditional ... Read More