Some of these things I tell my clients, and they are not too happy listening to this stuff…so let me enumerate them:
1. Managing your own money is very easy: No nobody believes this. Most people believe that managing money is a very complicated process and is a great amount of mumbo jumbo. If you want index returns, invest in an index fund, it works!
2. It is possible to invest in direct equities, but it requires effort.
3. You should be willing to learn BASIC accounting, and be willing to read, and learn. There is no escape from reading and learning. Without these two things, well equity investing is difficult.
4. You cannot do direct investing in equities without having a lot of STRESS FREE TIME, inclination, willingness and ability to lose money, and the grit to take losses.
5. You need to maintain an investment diary to see what is happening in the market AND HOW YOU ARE REACTING to those changes.
6. Market is normally rational. The investor’s reaction is irrational and many a times stupid.
7. Trading is not investing. Trading and Investing require different skills.
8. Finding a good broker today is IMPOSSIBLE. You find young graduates / MBAs who have revenue targets at the other end of the phone. Many of them do not know the difference between a Gold fund and Goldman Sachs Nifty bees.
9. Leveraging and Investing is only for the very rich who understand safe borrowing, surely not for the retail investor.
10. Couple of unscientifically done trades resulting in good profits DOES NOT MEAN you have become a good trader or a good investor . In most cases it is just luck.
11. To invest in an index fund you can ignore all the points from 2 to 10. Mail me and I will tell you how.
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