Investments for Defense

With the new NDA government coming to power, many investment experts believe that India is on the threshold of a long term secular bull market. While it is certainly easier to make money in bull markets, it is also easy to make mistakes in bull markets. Mistakes cost investors money and therefore must be avoided. We should clarify that this article is addressed to investors. Here are eight common equity investing mistakes in bull markets. 1. Trying to time investments at the start of a bull market: Retail investors wait too long trying to time the market. Most retail investors are not able to spot a bull market when it is taking off. When the market runs up significantly, retail investors realize that they have missed the bus. Timing the market is incredibly difficult. Even experienced professional investors often do not get their timing correct. Equity investing should be goal based, not ...

Hardly 24 hours remain for the world to know who is going to occupy 7, Race Course Road, the official residence of the Prime Minister of India. All of us are waiting with bated breath to know if Narendra Modi as predicted by the exit polls will win the elections or will the Indian electorate throw up a surprise tomorrow. The exit polls have already given thumbs up to NaMo and team but history shows that we cannot blindly follow these numbers. In this scenario, the question that plagues most investors is what should be their plan of action for May 16, 2014. I have tried to answer this question by putting down three scenarios that can emerge tomorrow and what investors need to do if any of them becomes a reality. Plan of Action for May 16, 2014 Scenario 1: Narendra Modi led BJP comes to power, finally ending ...

Indians have always considered Gold as a safer option to invest vis-a-vis other investment opportunities like equities, fixed income, real estate etc. Gold’s ability to act as a hedge in times of financial emergencies is one of the main reasons for the yellow metal to find a favour with Indians. Gold is also believed to be auspicious and in addition to this has proved to be a prudent investment option for a long time now. In the last few years, we have been seeing a trend wherein young and savvy investors are looking at gold as more of an investment instrument rather than a commodity to be passed onto posterity. Hence, they prefer to invest their surplus into gold via instruments which are hassle-free and are more viable than investing in physical Gold. The mutual fund industry offers multiple alternatives to physical gold if investors wish to take an exposure ...

As a Financial Planner and an Investment Advisory firm, we come across quite a few biases over-and-over again while dealing with people from all walks of life. Sometimes it is quite surprising that many of the people know more about the state of nation’s and USA’s finances than their own! Investment myths abound, leading to mis-purchasing and misdirected savings. Due to this many investors burn their fingers and then swear to stay away from perfectly healthy investment avenues, only because they actually did not understand what they were getting into, in the first place. Here we present to you four very common investment myths. Myth 01: I have made my Tax Saving Investments, so My Job is Done. Fact 01: People who want to invest but are not too serious about it belong to this category. This is a common mistake made by investors. Saving on taxes is a good ...

Errors Investors Repeatedly Make in Choice of Investment and Timing Behavioural Finance is a very interesting field of psychology. It studies and analyses the reaction of people and their bias when faced with investment decisions. Please read the instances given below – do you relate yourself to any one or more of them? You have your investments in various stock-related instruments – equity and equity-diversified mutual funds. Some of these are in profit while some are in loss currently. You need some money urgently. You sell the profit making ones. Effectively you have sold the ones doing well since you keep hoping that you will ‘recover back your loss’! This explains why people realize the gains of winning stocks too soon. The flip side of the coin is people hold on to losing stocks for too long; unfortunately, many of the losing stocks never recover, and the losses incurred continued ...