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POSTED BY ON April 8, 2012 10:29 am COMMENTS (3)
Hi All,
I am sure there are at least some people on this forum who can put their hands on their hearts and say ” yes, i have made profits from investing directly into stocks” apart from Mutual Funds, FDs, NSC, PPF, Bonds, Cash, Gold, Real Estate, etc etc.
I am ready to take the risk of copying someone’s stock investment ideas, if they have been succesful in the past in getting profits from stocks.
Otherwise, like everybody i should be happy getting returns from other avenues.
Regards
Chandrakant D.
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Dear Chandrakant, I’m personally at comfort with the avg. return provided to me by the MFs. I know very well that stock picking skills may improve my wealth in a big way but honestly speaking – I do not have those skills so I have handed over the charge to the competent ones – fund managers. 🙂
Thanks
Ashal
Direct Investment is not about just copying portfolios. It is about the temperament to hold on to portfolios when the bear strikes big time assuming one has done a due diligence in picking the stock at the first place. Mr. Market is an irrational guy. He will value stocks in an irrational way. If a company says they will grow 25% annually Mr. Market thinks the company is great. If the company still grows only 20% (a good number by absolute standards) versus the anticipated 25% Mr. Market will say the company is poor and value them way lower than he did a year ago.
To win in the market more than the stock picking ability people need temperament. When you see you invested Rs. 100 and see it rising to Rs. 400 and falling to Rs. 150 it is more likely one will sell. The temperament is of even more importance. It is not related to high earnings at all. Someone investing even RS. 40000 per month to invest in stocks will need the temperament to succeed. Else they will chicken out when bear strikes getting out for lower gains or worst, with losses.
If you think you will have the stomach to bear wild wild market swings go for direct investing. But MF investing is the best solution for a majority of us.
In general if you start with 5 lacs and you are able to double your money every 5 years (~15% CAGR) then in about 30 years you would have gone through 6 doubling cycles and the initial 5 lacs would have become 3.2 crores. Mutual funds can most probably do that for you. But keep asset allocation in mind http://wp.me/p1Y418-24 and be invested in Debt instruments as well.
This is the best way to generate wealth!
I am also looking for someone who really know about share market and how to analyze..I am ready to analyze but not very sure as to what are the things needs to be analyze..could somebody redirect us to a website blog where we can get the information. Thanks.