The first step is always the hardest
Any journey you have taken the first steps were always the hardest. Be it learning to ride a bicycle or literally the Goa trip you planned with friends in college, the initiation was the toughest part. Now when you look back those were the best days of your life. For me writing each blog is a Herculean task and I have procrastinated and did not push through at least 50-60 drafts, which might also be a blessing to all my readers.
This article would make sense if you have already done your research on Investing , If you haven't please go through these articles
1) Way out of the Payday to Payday Rat Race
Today I come to you with quotes with investing as a context, Over the last 5 years since I have started investing at least 50-60 people I know have asked me at one point or the other how to start maximizing their returns, back then it was slightly tougher and you had to contact different stock brokers and they would ask for a huge set of documents. Now almost all of them have transitioned to user-friendly avatars where you can use the mobile app and open a Demat account real quickly, Thanks to Upstox, Zerodha and Co, and out of these 60 people only 5-6 people have started investing in stocks as far as I know.
Especially over the last year with the bull run, everyone wants a piece of it. Finally just before the plunge the back-off. I have listed some of the reasons that people do not take the first step
1) You need a huge amount of money to start investing
You can easily start with 2000 per month for a year. End of the year look back at where you have reached, high chances are you would increase you're per month allotment and stay the full course for the future.
2) You need to be glued to your screens and spend all your time analyzing charts
Investing in index funds or reputed firms is the way to go. These firms will give decent returns and pay dividends as well. You only need to follow stocks that are medium or high risk from time to time. If you select the low-risk ones you can sleep peacefully.
The easiest thing to do would be to invest in the top 50 companies in India (Nifty 50) and select an industry you are comfortable with. For me its Information Technology, FMCG & Automotive
Smallcase is also an amazing tool where you can invest in a super relaxed mood.
3) Its a risky investment
It is only risk as your greed dictates, If you regularly invest 2000-3000 rupees in a reputed or branded company for a couple of years the stock will safely give you double the return of a Fixed Deposit ( Banks give 5-8% returns).
From my personal experience, I have seen over the 5 years, that people who wanted to make quick money or get rich quickly have always lost money while people who just wanted a better return than Fixed Deposits, PPF, etc have made tons of money. It's very funny to think that people who wanted to make more money ended up losing money while people who didn't take risks and played it safely made 10 times more money
My first rule while investing is that lesser profits are acceptable, however, a Capital loss should never be tolerated.
* Once you start earning handsome profits don't start thinking you have mastered the market & try to outsmart it.
* Don't go after every stock which is trading below 100 / 50 Rs (It might not be a great deal)
* Don't keep on waiting for the perfect entry, if that was easily possible everyone would be making 100 % profits.
* Don't invest money other than what was allocated for savings / FDs.
* Go after safe stocks and expect to wait for 2-3 years for good returns (In most cases you will arrive there earlier. (Invest in Good Companies)
* Diversification - Try to buy companies in different industries and don't allocate more than 10% of your portfolio to one firm
* If you lose out on one great opportunity it is fine, another good or decent opportunity will come. Don't have FOMO and succumb to peer pressure (Remember it is okay to have lesser profits rather than Capital Loss)
* Don't come into the market to get rich Quick
* Learn to invest in your decisions rather than hot tips
Play the safe game, Play the long game & Always win the game.
In 2008, Warren Buffett issued a challenge to the hedge fund industry, which in his view charged exorbitant fees that the funds' performances couldn't justify. Protégé Partners LLC accepted, and the two parties placed a million-dollar bet.
Buffett has won the bet, Ted Seides wrote in a Bloomberg op-ed in May. The Protégé co-founder, who left the fund in 2015, conceded defeat ahead of the contest's scheduled wrap-up on December 31, 2017, writing, "for all intents and purposes, the game is over. I lost."
Buffett's ultimately successful contention was that, including fees, costs, and expenses, an S&P 500 index fund would outperform a hand-picked portfolio of hedge funds over 10 years.
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