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  • Category: Miscellaneous

    Investing in markets is a gamble or calculated risk.

    These days we are seeing a surge in advertising about stock markets, mutual funds, options, futures, trading, commodity, etc. I come across daily in newspaper, on the internet and also see people talking about shares and stocks and these advertising agency making you a millionaire in few years of time and asking you to start a SIP or invest in stocks or start trading to build a future and what not.

    I personally feel that this is just a gimmick and investing in stocks without proper knowledge is like jumping in ocean to swim just by looking at people how they swim.

    These advertisement just brainwash your mind and compels you to invest your hard earned money in stocks on promise that the economy is growing and your money will also grow exponentially. They publish only succes stories but never publish a failure story where people have lost everything to the markets because they invested without much knowledge. Just giving a warning that investment is subject to market riakbis not sufficient, when you are on other end luring them with dream of becoming a millionaire or billionaire.

    I agree that economy of India is growing but I want to see that growth in terms of jobs created and in terms of poverty eradicated or reduction in crime, etc rather than just people becoming millionaire by investing in stock.

    What opinion members have regarding the same can be expressed in detail.
  • #637105
    It is a high-risk investment. It may give you very high profits but sometimes you may lose the original amount also. It is how it happens. It is better to invest in Mutual funds than in shares if you want your money to be safe. If you want higher returns and if you are ready to take the risk you have to go for share market. There are people who minted money in share market and there are people who lost everything in the same market.
    It is never advisable to invest in the stock market without a proper knowledge of the subject. We can take the help of some well-known advisers who are good in that area and if we go according to their advise we may have a chance of increasing our assets value.

    drrao
    always confident

  • #637108
    It is very difficult for a normal investor/trader to make money in the stock markets without some knowledge. Even if someone has some knowledge, there is no guarantee that the stock markets will react according to his view. There will be hundreds of views which drive the market. So, one view is not sufficient to drive the markets. Hence it is advised not to follow any advisers, who appear in business channels or business news newspapers. If some adviser wants to buy some stock, he will buy the stock quietly without making any noise so that he will get the stock at cheaper price. If someone advises some stocks, there will be some ulterior motive behind.
    The best way is to invest in some fundamentally good companies and leave it for some time. Invest in equal amounts in 10 - 15 different companies of different sector. If at least 3 - 4 shares click, you can become rich.

  • #637113
    In any of the available mechanisms in the market one thing is common. There are certain terms & conditions that we have to adhered to before finally we owe any of them. These terms & conditions are specifically allotted with the assumptions which could lead to any of the side of profit & loss & so in the end we are left with the little choice.

    I am stopping here as I am not an expert in the portfolios or any other schemes but anyone opting for any options should well be taken care of the various terms & conditions & the risks involved.

  • #637116
    Only highly qualified and experienced personnel, normally those with the ACA or Chartered Financial Analysts (CFA) qualification, can do the job.

    In fact, the mutual funds is a viable mechanism for the middle class to invest in the stock market. You and I cannot even understand the basics of investing. There are seasoned professionals. They do know what to do. For instance, when there are reports that there is quite a bit of a drought, due to inadequate monsoon, they will boldly buy stocks of a particular company dealing in what is called drip irrigation.

    The stock price will go up and when there is a huge profit, they en cash the money. This is legally allowed, with certain conditions, and the Securities Exchange Board of India (SEBI), acts as the watchdog, and this body can regulate every single move of the mutual funds. It can regulate the market, since it can change the rules too. For instance, in the case of Unit Linked Insurance Products ( ULIPs) a huge amount of money was cornered by the agents, and the investor was left high and dry.

    SEBI stepped in, and regulated the commission that can be paid to the agents.

    Eliminating poverty is another story altogether. Today, mutual funds is the only viable alternative for the middle classes to earn some money. Please do note that only the capital appreciation in the case of any fund, is taxable, and, the limit is one lakh. That is, if your capital appreciation is one lakh rupees, or more, you have to pay ten per cent as income tax.

    Regarding tall claims, you need to do your own research. There are superb firms that operate on your behalf, and help you to do the right investment. Kindly note that even in the case of the Systematic Investment Plan, where one can invest something like Rs. 500 per month, and keep it growing, there is absolutely no risk involved, as your money is very safe and nothing will happen. At the end of say, 48 months, you will get something like Rs.28,000/-, which is much higher than what you will get through a bank recurring deposit. Please do note, that the Recurring Deposit income is taxed every year. You have to show this income in your IT returns. The tax guy will be watching whatever you invest. You cannot hide anything at all.

    After one year, the SIPs are not taxed.

    Regarding investment in stock market, it is a very risky investment, even in normal times. If, say, there is a war like the Kargil war, with Pakistan, even the Mutual Funds will take a huge hit. In that event, you must try to exit, with whatever gains you can make, and then re-enter the market when you the times are good.

    In spite of the horrible effects on the common man, the economy is growing. Imagine, for example, what will happen to the FMCG companies? Even those that market small packets of some local pickle brand, in limited markets, will make money, as there are always buyers for such products.

    So, if you want to invest, better do your research, and then do it, with the help of an expert. Please do not get into it directly, as the knowledge base is acquired only over twenty years. There are professionals who have stayed with the trade for so many, if not more, number of years.

  • #637119
    The author is right that " jobs created and in terms of poverty eradicated or reduction in crime, etc rather than just people becoming millionaire by investing in stock." Yes, that is an ideal It is the aim of a welfare state. Every nation tries to become like that only.
    The difference is in the means and methods such high ideal is attained.

    Jobs are created when there are more productive ventures. That includes primarily agriculture and then manufacturing. Then comes servicing. However for any such venture capital is needed.As the requirement of capital is huge when the venture is huge, it is natural that one or two persons or the government itself may not be able to bring such huge capital. The stock investment and stock market becomes relevant there.

    In due course, the stock investment itself created more service ventures which also gave jobs to many. Now the financial sector which includes the stock investment or stock trading also is a large provider of jobs.

    So it is also needed to create jobs,create profits and also to facilitate new productive and service ventures. It is by such stock investments that huge capital is invested in agriculture and related sector also.

  • #637128
    In Tamil there is a saying that if you know the route, you go in that direction. Like wise stock market is full of actions and even last minute reactions would fetch good amount. One of my friend who got money through sale of his property has decided not to work but buy shares and sell them when little boom was going on. So daily he keeps eye on the stock market, political overtures. natural calamities and other risk factors which affects the markets. Accordingly he advise his broker to buy or sell his shares immediately. On an average he earns 2000 per day just on gambling of share movements ?
    K Mohan
    'Idhuvum Kadandhu Pogum "
    Even this challenging situation would ease

  • #637143
    Only highly qualified and experienced personnel, normally those with the ACA or Chartered Financial Analysts (CFA) qualification, can do the job.

    In fact, the mutual funds is a viable mechanism for the middle class to invest in the stock market. You and I cannot even understand the basics of investing. There are seasoned professionals. They do know what to do. For instance, when there are reports that there is quite a bit of a drought, due to inadequate monsoon, they will boldly buy stocks of a particular company dealing in what is called drip irrigation.

    The stock price will go up and when there is a huge profit, they en cash the money. This is legally allowed, with certain conditions, and the Securities Exchange Board of India (SEBI), acts as the watchdog, and this body can regulate every single move of the mutual funds. It can regulate the market, since it can change the rules too. For instance, in the case of Unit Linked Insurance Products ( ULIPs) a huge amount of money was cornered by the agents, and the investor was left high and dry.

    SEBI stepped in, and regulated the commission that can be paid to the agents.

    Eliminating poverty is another story altogether. Today, mutual funds is the only viable alternative for the middle classes to earn some money. Please do note that only the capital appreciation in the case of any fund, is taxable, and, the limit is one lakh. That is, if your capital appreciation is one lakh rupees, or more, you have to pay ten per cent as income tax.

    Regarding tall claims, you need to do your own research. There are superb firms that operate on your behalf, and help you to do the right investment. Kindly note that even in the case of the Systematic Investment Plan, where one can invest something like Rs. 500 per month, and keep it growing, there is absolutely no risk involved, as your money is very safe and nothing will happen. At the end of say, 48 months, you will get something like Rs.28,000/-, which is much higher than what you will get through a bank recurring deposit. Please do note, that the Recurring Deposit income is taxed every year. You have to show this income in your IT returns. The tax guy will be watching whatever you invest. You cannot hide anything at all.

    After one year, the SIPs are not taxed.

    Regarding investment in stock market, it is a very risky investment, even in normal times. If, say, there is a war like the Kargil war, with Pakistan, even the Mutual Funds will take a huge hit. In that event, you must try to exit, with whatever gains you can make, and then re-enter the market when you the times are good.

    In spite of the horrible effects on the common man, the economy is growing. Imagine, for example, what will happen to the FMCG companies? Even those that market small packets of some local pickle brand, in limited markets, will make money, as there are always buyers for such products.

    So, if you want to invest, better do your research, and then do it, with the help of an expert. Please do not get into it directly, as the knowledge base is acquired only over twenty years. There are professionals who have stayed with the trade for so many, if not more, number of years.

  • #637149
    Answering to the title question, there are people who gamble and those who take calculated risk.
    At least the beginners or small and retail investors should not take it as a gamble,but invest by knowing the inherent risks and knowing the positive factors which can negate or reduce the risks.

  • #637673
    Everyone who's into stock market knows that it is a gamble and yet many burn their fingers. It is the desire to eearn quickly that motivates people to get into such ventures.

    As long as we follow discipline and rules we set for ourselves, we can limit our loses.We need to do our research, we need to check the markets regularly, we need to have advisors and lastly we should not put money that would make us lose our sleep if the market crashes.

    People are entices by high returns promised without realizing that the risks of a loss are also equally high.

  • #637680
    Or it would be better if we know of some expert in this field who can also be rely upon too. Hope this will reduce the risk & at the same time more correct information can be shared.

  • #637681
    Everyone wants to make money by investing and mutual funds are helping the common people in meeting this objective.

    Investing in shares without a sound knowledge of the top companies in the market is a fatal error and many people have burnt their fingers in this game. Initially it appears as a calculated risk but later it often turns a gamble.

    Still, the golden rule is there which says - invest in a mix mode in a few top companies for a long duration. Do not keep your eggs in one basket. Do not fear the political and business situation which come and go. Stay invested. Sell when you need money. If you are smart only churn your portfolio but never sell.

    I do not know who coined these magnificent words of advise for an investor but if you see the historical chart of performance of shares it appears logical and true. Mutual funds are doing same thing but at a larger platform.

    Knowledge is power.


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