There are some more questions that doctors ask…let me start..

  1. Why should I invest in equity shares / equity mutual fund at all?

To grow your money over a long period of time. It is surely better than buying endowment policies, PPF, etc. over say 10-15 years of time. You get a chance to see your money grow over a long period – much better than debt instruments like debt funds, etc. Market will go up and go down – and subject to a lot of volatility. Direct equity will also create a secondary income cash flow aka dividends.

  1. How do I know which shares to buy?

It depends on what you want your portfolio to do! If you want high growth maybe you should buy start ups and be willing to write off many investments. If you wish to have a steady portfolio you should look at large cap shares and you should be willing to hold on for 10-12 years. This is always the recommended holding period, it could be longer or short, but you should not sell the shares in distress. However, if you decide to invest in equity mutual fund, you can invest in large cap mutual funds, but buy small cap shares. It may not make sense to buy Reliance and Hdfc – you find them in all portfolios. However you can buy MRF, Bosche, LMW,  -typically good shares to buy and which the fund manager finds it difficult to buy in big numbers.

  1. You talk of equity success, why should we buy mutual funds?

I have been educated as a CA, done equity research and worked as a broker-advisor for a long time. I don’t know your background. You are a doctor and will not have enough time, willingness, patience and money to learn. So it may not be appropriate for you. I know doctors who are good investors, and those who are a disaster. The question to answer is “am I willing to invest in learning before I invest my money”. If you invest all your money in a few stocks you might make big losses. However, if you invest on a regular basis in a big portfolio – aka mutual funds – you are likely to gain less, as well as loose less.

 

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  1. As a doctor, I completely agree that we have these doubts. I too had all these before I started investing in mutual funds.
    Please guide how to start “investing in learning”. Do we have a structured course anywhere in India where I can learn investing. I don’t think any MBA degree will be helpful.
    Taking from your post – I have the willingness to learn, I have the patience to learn, I have the money to learn and I have the time also to learn. What I do not know is how to start learning in a proper structured manner. Till now, my learning is from you, Manish’s jagoinvestor and similar websites. These websites have opened my eyes completely. But I would love to go further. How should I approach learning investing?

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