by ptrikha21 » 28 Sep 2024, 15:13 Disclaimer : The views presented here are based on my own knowledge and experience.
In no way are these any guaranteed points or formula for a successful stint with Stocks, MFs or related investments.
Each individual has to chart his or her own way, best suited to their time, resources and appetite.
Even with a great number of challenges in terms of Social and Political changes and Geopolitical equations, India has been one of the fastest growing economies worldwide.
We have seen a good influence of this growth and incoming investments in the Stock Markets and the Mutual Funds, with some spillovers on to the Bond Markets.
Consumer interest and interest in market has surged.
Yes, Stocks and Mutual Funds (In short : MFs) offer a good growth prospect.
Yet, one needs a lot of knowledge and workable planning or actionable skills.
Acquiring these could seem overwhelming at times, often due to some historical bias, fears of inherent risks and often lack of time.
So, is it all despair? No!
One can build up on knowledge and workable planning skills in a number of ways.
Let us explore:
1)Start early and spend time :
If you are 23/24 plus and have started in a job or your own Business, open a De-Materialized account : DeMat account in short.
One can start with smaller amounts, for both stocks and mutual funds.
Once one gets some profits and more money, one can gradually increase.
In the initial years, do not rush.
Resist impulsive buying and even those crazy suggestions of your supposedly best friends.
Listen but act on your own judgement.
2)Once you have started and have been in the midst of it all, start interacting slowly with like minded people.
Your colleagues and friends.
Listen to their experiences, recommendations and perspective.
Make notes sometimes.
Think and see if some of their suggestions could work.
Invest in a conservative manner if you like the suggestion.
Do not invest in a big way.
At times, talking to others can help in gaining knowledge and overcoming our personal bias.
3)Do not try to "time" the market:
Fact is that the "timing" is relative.
As an example :
If a Stock Y has got a high PE (Price to Earnings )- say 40 and has seen a 70% jump in prices over the last one or two years, one instinct could be to sell it and make a profit.
However, if this is a company on a high growth and profit path for upcoming few years, it could be better to do no or part profit booking and let the rest of amount grow more.
Plus buying on dips is good but if a company is likely to head deeply into lower growth rate or in a negative zone, this won't help.
So do buy/sell but do your research and homework thoroughly and do not go by News/Suggestions of "best" time or "worst" time blindly.
4)Go for incremental buying and diversification:
Got a good bonus of say 60 K amount in your currency?
You might feel like putting all in one basket.
However, it is better to split and put in Shares, Mutual Funds and may be Bonds.
Also have MFs in Equity, Debt and Hybrid (or balanced) funds.
The diversification would help just in case the Market undergoes The "Corrections"(dips).
The ratio is something that you have to personally decide.
5)Use more than one source of information but not too many :
I think min of 2 and max of 3 Apps/sites is enough to help analyze stocks.
One also finds YT experts but not all are actually "experts".
Some could be basing their advice just based on a few mthematical calculations.
Too many sources can also confuse you.
6)Do not try to blindly copy others:
So your friends did all this :
A) Bought 500 shares of company ABC.
B) Sold 250 shares of company XyV.
C) Sold 1000 shares of another company
and he or she tells about an enormous profit.
So you decide to copy and follow suit?
Well, first analyze, plan and then do. If things do not suit you, do not blindly copy.
All in all, there is a lot, lot more. Some methods/suggestions could even work for Corporate Bonds and even Crypto.
Yet, you have to study, analyze, think, see how much risks you can take, and your monetary constraints and time.
Make an informed and non-impulsive decision.
I hope this Article of mine helps you in your journey.
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