Post on 02-Apr-2018
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B U Y R I G H T, S I T T I G H T B U Y R I G H T, S I T T I G H T
A BEGI N N ER S GU I D E TO IN V ESTI N G
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In the recent past many investors
because their portfolioshave not d
our research on thismatter points
stocks, over-diversification, investinasset classhasoutperformed all oth
should play an important role in o
the long-term. Hence, it'simportan
to equity markets. With this obje
embarked on a new mission the 'M
The aim of the mission isto make
they need to follow to create wealt
You too can create wealth for yours
read through thisshort book on the
get started.
Happy Investing!
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IFFERENT WAYS TO
Investing isputting money aside today
done by investing in a number of asset cla
Wealth creation ispossible through inve
require specialised knowledge and requ
G old, while it hasappreciated sharply i
returnsover long periods, while giving n
Investmentscould be made in financia
and companies or debt instruments
investmentsare made to generally get
with the original capital being reasona
While interest income generally get
appreciate very much asinflation eatsin
A common method of creating wealstock or equities in the stock mar
through dividends. These can be soldover the cost is the a
D
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REATING WEALTH
STOCK MARKET
Trading isbasically escorting a shar
the difference being the profit on t
concentrating on the industry, com
only criterion for purchase and sale.
These decisionsare based on mo
elaborate study. To the trader price
Trading could be intra day, or positi
few weeks. Thisway a trader coul
and hiswealth creation could be th
number of trades.
Trading There are tw o ways of wea
C
&
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While wealth creation through tra
heartening. T he trader ispitted in a
the rest of the world, which isthe m
T he trader haslimited capital and resourcesare infinite. Each trade
from the market to the trader if hisc
he losesmoney to the market. The
if the trader getsall the money from
trader losesall hismoney to the o
limited, the oddsare stacked overw
Experience showsthat 98% trade
very few who make it big through tr
Investing is another waywealth through t
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Trading may be a 100 metre sprint, but
thatswhere Investing comesin. If Trad
Test M atch.
The planning for the game ( in investing
and T20 cricket formats( Trading), the
the aim isto hit out and score asfast as
doesnot matter asthe next batsman ge
In test cricket ( Investing), the aim isto
inningsto reach a sizable score for ones
Investment is something, whic
safety of principal a
RULE NO. 1
Never lose money
INVESTING HA
~ Benjam
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CWhile everyone aimsto make it big thr
Hard work and enthusiasm may be r
counter productive in investment. T
make unknowingly which lead to wea
bear in mind are:
Investment in stocks doesnot requ
make it their whole time profession
Work increasesto take care of the
activity and mindlesstrading.
T here isno plan for the processof w
having a processisgood luck. And as
Profit issimply the difference betwe
price isin the realm of many factor
price iswell within onescontrol.
Dont work for your stocks, let your stock
Hence you not only need to plan your pla
your plan when investing.
Develop a methodology for stock selectionthat you can understand.
OMMON INVESTING
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Have the purchase price to be so attr
attractive return.
Look at businesseswhere you can selook at companies within the indu
competitive advantage and potential
be done very simply by keeping your
Try to find about management integ
way it treatsits top team and mor
management, its ability to adapt to
customers, its creditors. T his ca
information or by talking to su
employeesand other companies.
Never get out of a stproblems. Dont ha
NVESTING BASICSI
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Investing islike playing a test match. O ne
up a huge score over a long duration of
economic environment, industry trends,
least three years and the management
through dividends. Some simple rules to
Study at least three years working results
Look for consistent performance, one y
managed.
The Return on Capital Employed and Ret
Steady performance isnot enough, grow
15% growth in earningsand 10% growth
There isa dividend pricing model for shar
of dividends. In simple terms, it suggestst
price. Secondly, the higher the compoun
price.
Buying a good stock isnot enough. Bu
dependsnot just on the exit price but als
I f you dont have the time to study you should take the advice of your in a Portfolio Management Schem
NVESTING GROUND I
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Some of the biggest fortunes hav
invested wisely and held on for year
the worlds richest men has madinvestmentsfor decades. T he mora
Warren Buffett in thiscontext hassaid
Steady uninterrupted investments in
compounding. Albert Einstein once s
Steady well chosen investments
permanent losses. Buy a basket of
industriesand hold on for long period
A n investor has to do a smavoid major mistakes to
Compounding is the eig
UY RIGHT & SIT TB
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Here are some compounded annu
companiesby holding on for 20 years
In addition to the above steady grow
companiespay dividendsperiodically
2% of the current market value of
thought out policy of dividend payo
move in line.
*T he stocksmentioned above are to illustrate a point. Pa
doesn't constitute anyadvice or recommendation from M o
discretion or consult a financial advisor. Personnel of Mot
short position in the stocksmentioned above.
HE POWER OF INVET
Berger Paints
C ipla
Eicher M otor
HDFC Ltd
HD FC Bank
Hero Honda
Asian Paints 25%
31%
30%
30%
23%
25%
28%
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UMMARY
Owning a portfo
stocks in non-cylike owning an o
trees. It keeps yoregular supply oland on which th
continues to app
Happy Inve
S