Being a Stock Investor sounds cool and fashionable for beginners. A typical beginner stock investor is in early 20's fresh out of college. Disposable income is high and on top of it, there is a strong urge to multiply the money. Greed is the biggest PULL factor towards stock market. I discussed greed and fear in detail in my post, Successful Investors - 5 Hidden Secrets to Make Money. In my opinion, Out of 100 so called investors, 80 are Stock Traders and only 20 are Stock Investor in the true sense. The objective of a stock trader is short term investment, book profit, and exit. I am not ... Read More
Stock Market Crash – The Pain is NOT YET OVER
Yesterday's stock market crash is the beginning of series of crashes as we observed in 2008. Once the FEAR grips the market then Stock Market Crash is inevitable. There is 360-degree selling. The market has convincingly broken the psychological level of 7000. There was simply NO attempt of recovery. From quite long, i am cautioning readers of this blog to EXIT the Market. Some brave hearts are still hopeful. Current P/E levels are 18.75 and it is still expensive considering the poor corporate results. The FII's are emptying their bucket and they are in a quite hurry to do so. The inflows to ... Read More
Balanced Funds – Why it is not a Good Option to Invest
Balanced Funds are the new lifeline for Mutual Fund Industry. These funds are also known as hybrid funds. Balanced Funds are of two types i.e. equity oriented and debt oriented. Equity oriented balanced funds invest 65% to 80% in equities and balance in debt instruments. On the other hand, debt oriented balanced funds follow the reverse strategy and invest around 70% to 80% in Debt Instruments and balance in equity. They are also referred as capital protection funds. I explained the same in my post, Should i invest in Capital Protection Funds? For practical purpose, Balanced Funds means ... Read More
Why Retail Investors Lose Money in the Stock Market
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
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
Arbitrage Mutual Fund – The Right Choice
Arbitrage Mutual Fund is a unique type of mutual fund. If i tell you that i invested in an equity mutual fund that is almost 100% risk-free. You will think, have i gone mad?. The answer is NO. Arbitrage Mutual Fund is an equity mutual fund but provides USP of a debt mutual fund i.e. capital safety. Investors invest in Arbitrage Mutual Fund as an alternative to Debt Mutual Fund or during volatile times. Utterly Confused!!!. I also got confused when i first came to know about this product. As i discussed in my post, Debt Mutual Funds - 7 Hidden Risks that contrary to popular perception, debt ... Read More