GURUSPEAK on Risk Free Investing
"Ratio of risk to gain in an investment plan should be 1:3.Only then is the plan worth considering ."
These were the words i heared in a confrernce organized by a company that marketed itself as champion of risk free investing.
Risk free investing is sure a line they might be using with an intention to lure people, but company was not in brokerage business but in the business of imparting education.Education on investing.
As a new investor , i was eager to hear about "risk free" investing.
Some moments from the presentation were quiet striking (for they made me aware of some harsh realities) . The presentation goes as:-
" Indian stock market is full of careless investors. Half of investors have no idea what they are doing.Lack of awareness about stock markets and equity is the reason why so many people loose money.Aother reason is that people trust broker more than themselves.There have been hundreds of brokers and there are dozens of successfull , big and money minting brokerage firms. Ask them how much money have they made ?....they will quote huge figures. Ask them how much money there cutomers have made ?....they will tone down their voice. Finally ask them what percent of their customers are making money?....probably they will find someone else to chat with.But that is really not an issue with brokers , they are really there in the first place to make money,afterall that is what one goes to stock market for."
The whole idea behind all the talking will be clear from a real incident ......
One fine noon , a person calls his broker to buy some shares for him today.....as it is an auspicious day and he feels like buying .He asks the broker for some advice on how much he should buy....mind you....broker tells him what to buy.....and the person again waits for broker's advice to sell those.
Quiet laudable and dangerous situation too.So bottomline is awareness about the market is must and also knowledge of inside-out of investing. Of course no one has always made money here at all times , but one can surely reduce risks and insure profit through little efforts.
Key points to remember are:-
1. To make money is the only reason to be here in stock market......if u want to try your hands i feel cricket,cooking or modern arts(i am yet to understand what it is all about) qualifies best.
2.Be well informed about the market....its past and present.
3.If u want to invest ...best time is now...bcoz tommorrow never comes.
4.Take advice,consult people,discuss investments but trust yourself only and take your own decisions(baaba aadam ke zamane se chala aa raha hai yeh advice).
5.If u cannot stand seeing the prices of ur stocks fall by 50%, stock market is not a place for you.One needs guts to be here.
Now some advice on risk free investing :-
1. Overall your performance should be :- if x times profit,y times loss then x>2y.
2.Hand pick your options and stocks...for no one knows better.
3.Always have in sight how much u wish to make out of the deal.In other words motive should be crystal clear before investing.
4.Decision should be based on your calculations and market expectations.It is very important to know in this case how will market and especially your stock behave in near future.
5.Dicide ur point of exit (point u will sell) based on above calculations , before buying the stock.
6.Discipline is the key....when the point comes ,sell it.....do not be greedy in case stock rises beyond ur point of exit....its better in that case to be absolutely sure about the time they will fall.
7.Incur habit of applying stop loss order.
8.Diversify your portfolio (most important).
9.Learn tools to analyze market and predict amrket patterns.
i will discuss some tools in near future that help predict the market patterns one of them being Gann Charts.
For someone to share with me knowledge about Gann charts (devised by W.D.Gann , a wall street legend) would be simply great!!!
These were the words i heared in a confrernce organized by a company that marketed itself as champion of risk free investing.
Risk free investing is sure a line they might be using with an intention to lure people, but company was not in brokerage business but in the business of imparting education.Education on investing.
As a new investor , i was eager to hear about "risk free" investing.
Some moments from the presentation were quiet striking (for they made me aware of some harsh realities) . The presentation goes as:-
" Indian stock market is full of careless investors. Half of investors have no idea what they are doing.Lack of awareness about stock markets and equity is the reason why so many people loose money.Aother reason is that people trust broker more than themselves.There have been hundreds of brokers and there are dozens of successfull , big and money minting brokerage firms. Ask them how much money have they made ?....they will quote huge figures. Ask them how much money there cutomers have made ?....they will tone down their voice. Finally ask them what percent of their customers are making money?....probably they will find someone else to chat with.But that is really not an issue with brokers , they are really there in the first place to make money,afterall that is what one goes to stock market for."
The whole idea behind all the talking will be clear from a real incident ......
One fine noon , a person calls his broker to buy some shares for him today.....as it is an auspicious day and he feels like buying .He asks the broker for some advice on how much he should buy....mind you....broker tells him what to buy.....and the person again waits for broker's advice to sell those.
Quiet laudable and dangerous situation too.So bottomline is awareness about the market is must and also knowledge of inside-out of investing. Of course no one has always made money here at all times , but one can surely reduce risks and insure profit through little efforts.
Key points to remember are:-
1. To make money is the only reason to be here in stock market......if u want to try your hands i feel cricket,cooking or modern arts(i am yet to understand what it is all about) qualifies best.
2.Be well informed about the market....its past and present.
3.If u want to invest ...best time is now...bcoz tommorrow never comes.
4.Take advice,consult people,discuss investments but trust yourself only and take your own decisions(baaba aadam ke zamane se chala aa raha hai yeh advice).
5.If u cannot stand seeing the prices of ur stocks fall by 50%, stock market is not a place for you.One needs guts to be here.
Now some advice on risk free investing :-
1. Overall your performance should be :- if x times profit,y times loss then x>2y.
2.Hand pick your options and stocks...for no one knows better.
3.Always have in sight how much u wish to make out of the deal.In other words motive should be crystal clear before investing.
4.Decision should be based on your calculations and market expectations.It is very important to know in this case how will market and especially your stock behave in near future.
5.Dicide ur point of exit (point u will sell) based on above calculations , before buying the stock.
6.Discipline is the key....when the point comes ,sell it.....do not be greedy in case stock rises beyond ur point of exit....its better in that case to be absolutely sure about the time they will fall.
7.Incur habit of applying stop loss order.
8.Diversify your portfolio (most important).
9.Learn tools to analyze market and predict amrket patterns.
i will discuss some tools in near future that help predict the market patterns one of them being Gann Charts.
For someone to share with me knowledge about Gann charts (devised by W.D.Gann , a wall street legend) would be simply great!!!
posted by i at 8:31 AM
0 Comments:
Post a Comment
<< Home