When an investor burns his finger, he then come to a conclusion that investing is dangerous and then begins to take a firm decision of not returning towards it. However, within a short time, he loses his patience and then opts for other forms of investment.
An ETF combines the valuation feature of a mutual fund, which can be purchased or redeemed at the end of each trading day for its NAV, with the trading feature of a stock, which trades throughout the trading day at prices that may be substantially more or less than its net asset value.
We have some time or the other, met someone who claimed that their financial portfolio was doing great, until one fine day it wasn’t. All this happens, mainly due to aggressive trading, picking the wrong stock, getting out too early and so on.
The most common and traditional form of diversifying one’s portfolio is by diversifying across various asset classes, such as equities, fixed income, real estate, commodities like bullion and crude etc. However, many investors will readily sacrifice this discipline when a particular asset class is faring exceedingly well. As a result, their allocations become distorted.
An investor who may like to invest in banking stocks presently will be limited by the number of stocks he can buy. On the other hand, a combination of banking stocks and a banking fund can do wonders both in terms of diversification as well as potential to benefit from the possible rise over a period.
Equity investing requires skill both in terms of stock selection and monitoring the progress of the companies included in the portfolio stock prices move to anticipate events as well as reflect the current events.
Many investors want to play safe and avoid exposing their money to market-related risks. But an overly conservative investing strategy also exposes you to a type of risk which finally leaves you without having enough money in the future.
… Most of them may not be prepared for the consequences of sudden wealth. It has been found through a survey that 35% of lottery winners turn out to be bankrupts within a span of ten years.
When I visited Places like Surat / Baroda in Gujarat, I met with some investment guru’s whose portfolio in stock in millions but was just not performing.
Typically bear markets are associated with economic contractions, recessions, high unemployment, low export and high inflation.
What are some of the investing lessons one can learn from the crash in the market of January 2008? Can one be better at trading learning something new from the crash?