1. Is it safer to invest in shares through IPOs?

Not at all. In fact it is riskier to invest through IPOs. IPOs are priced by professionals to get the best price possible for the promoter of a company. So the odds are against the investor and works in favor of the professional. So chances of getting a good price is almost NIL. Of course nearer to a downturn the shares could be conservatively priced and aggressively priced when the market is booming. Normally shares are issued in a up market, and hence priced against the small investor.

 2. Why do subsidiaries of foreign companies quote at a higher price?

 An MNC like Colgate, Monsanto, HuL, all of them get a higher price earning ratio and they grow well too. Hence these shares are quoted at a higher price. They have a long track record of rising income and dividends – so existing shareholders do not sell and new investors feel like buying more of them…so the demand is far greater than the supply, hence the price rise…

  1. Are there any advantages of investing in government companies

 

    No. There are no advantages investing in Government companies. Many of them are quoting below their issue price – thus breaking 2 myths – of investing in an IPO is a good thing and that investing in a government company ensures that you make lots of money.

    You make good money in a well managed company and you lose money in a badly managed company. ownership does not matter.

  1. Is there any guarantee that I will always get dividends in the good Tata Companies

 

    Again no guarantees. Tatas are a good group and is normally well managed. However if you see their performance in financial services for example, their performance OVER THE YEARS has been pathetic. Again as I said in the earlier question, well managed companies will give you INFLATION beating returns.

  1. I can spare about Rs 10k per month to invest – how should I go about investing in shares?

 

Do a SIP in a good fund….

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  1. Fund performance going ahead is not your responsibility, I understand this completely and won’t be blaming any one for any thing going for toss..

  2. NTPC is well well managed company and it is Operational performance is unmatchable. But it is PSU hence the PE rating is very very low comparatively Tata Power, JSW Energy…etc.
    How this cane be ruled out.

  3. Atul agarwal, sdk

    the reason why i do not suggest which fund to buy is because I do not know you. This is like asking a doc ‘suggest me a good medicine in a green package’. The doc cannot even understand the question.

    I need to know you, your goals, your time frame, your mental make up, ….just too many things. My answer could vary from a Liquid fund or an arbitrage fund right up till a Infrastructure fund with a high standard deviation and high delta…..

  4. Fair enough Sir, if you can share the email id, I can part with all the details about my investments/goals/current status/experience till now with investing. In isolation, I am looking for a SIP in good long term growth fund/’s for my sons education, he is 16 months old.

  5. sir,
    i’m 23 yr, started job 8 months back, can save 5k per month from salary, want to invest in MF SIP which gives good REAL returns,

    i just want any kind of material/books, pdf, guides or article u can suggest on MF.
    will be thankfull

  6. atul, my 2 cents here. i chose QLTEF when they were <1y for my son when he was <1y… both have been doing well – touch wood.

  7. sdk, i would suggest every wannabe investor to read ‘the intelligent investor’ by ben graham. in the early chapters you can decide if you want the active or passive approach & can skip almost half of the book. if you don’t want to buy, you get pdf version scattered around.

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