There is great excitement in watching your baby take her first steps.

Slowly…carefully…she gets up…walks a step…then falls down…then again she gets up…takes a step…then again falls down.

The process repeats till the time she learns how to balance her body while taking her second step, and her third step.

As a parent, you would love to hold her hand while she’s learning to take her first steps, but then you want her to do it herself so that she gets some confidence on her own.

This process of learning happens in whatever we do in our lives.

We first learn to take baby steps, before we cross bigger hurdles.

There’s no reason the cycle should be any different when it comes to investing in stock markets.
[Read more…] about The Best Strategy for a New Investor

An article in The Wall Street Journal caught my attention recently. It talked about how Americans, regardless of gender or education, become considerably less literate about all things money after age 60.

You see, humans are all the same everywhere. So what applies to Americans, also applies to Indians.

Anyways, the above conclusion was based on a test conducted by Michael Finke, an associate professor from Texas University.

The scores on a test measuring knowledge of investments, insurance, and money basics fell about 2% each year starting after age 60, falling from about 59% correct for those in their 60s to a dismal 30% for those 80 and older.

What was even a worse output of the study was that our confidence in our financial decision-making abilities rises with age. [Read more…] about If You Are 45 or Older, You Won’t Like To Read This

“Europe’s debt crisis is threatening to push large parts of the world into recession,” read a headline in The Telegraph.

The Greeks, the Italians, the French…the Europeans are seemingly all set to bring the entire world economy down to its knees, as if to prove a point to the Americans that they aren’t the only ones to be controlling the ‘recession’ lever.

Anyways, if the woes in Europe and the US aren’t enough, weakening economic growth and corporate profits in India are also playing spoilsport for the stock markets.

Note: Country names represent their respective stock market indices; Source: Yahoo Finance
One company here is asking the government to bail it out because it can’t pay off its debts that it had taken to fund an aggressive growth in the past.
[Read more…] about Fasten Your Seat Belt…Air Pocket Ahead

If you follow global financial news, you must have come across reports of the recent IPO of Groupon. Well, for those who haven’t heard of it, Groupon is an online seller of discount coupons, and acts like a ‘deal of the day’ website.

The company’s shares listed on the US exchanges on 4th November, and jumped 31% by the end of the first day of trading. This brought the company’s valuation to more than US$ 16 billion.

How much is US$ 16 billion? Well, that’s more than the respective market capitalization of 14 of India’s top 30 companies on the Sensex.

Now that’s not amazing. What’s amazing is that US investors have paid a high price for a company, which… [Read more…] about Groupon and the Great Stock Market Insanity called ‘IPOs’

I recently got the opportunity to lecture on the subject most close to my heart – the art of sensible stock market investing – at Tata Business Support Services (TBSS), Pune.

It was a great first experience. The audience consisted of 30 young and middle-aged executives who were great listeners, going by the questions they asked me after the lecture was over.

Here is my presentation from the lecture. I hope you get the value that you expect of it.

I also take this opportunity to thank Mr. Pradeep Bahuguna, Sr. Manager, Corporate HR at TBSS and an avid reader of The Safal Niveshak Post, without whose support this lecture wouldn’t have happened.

Here’s your presentation. Enjoy it, and please share it with your friends and colleagues who might be interested in learning the art of sensible, independent stock market investing.

If you are not able to view the presentation above, click here to view.

Click here to view the photographs from the lecture.

I am talking about the unemployed Indian youth, who has the potential to create big trouble for the country in the future, if his aspirations are not met.

Of course, the choice of bad investments, rising inflation, rising interest rates, or a weak economy also pose as big risks to your investments.

But then, these are some of the risks that you can see now. And over that, these are risks that are manageable to a great extent.

But who can manage or control a youngster, without a job for months and years, with himself and family to feed, and not knowing what to do to meet his basic needs?

Now imagine millions and millions of such youngsters and what their combined force can do to bring a country down to its knees, and with the it entire economic and financial system.
[Read more…] about The Biggest Risk to Your Investments Might Be Your Neighbour