[SmartCat]

Originally Posted by sinhead

Why do most people don't make good money in stock market?

Why most people make money in real estate:

1) They get the land/apartment documents verified.
2) They are very serious about the investment, because of large sums involved (Rs. 10 lacs for land, Rs. 40 Lacs for apartment)
3) They remain invested for the long term (5 years, 10 years, 20 years etc)
4) Nobody knocks on their door everyday and says "Sir, your land is now worth 9 lacs, 12 lacs, 8 lacs, 8.5 lacs etc". The value of the investment remains mostly unknown after investment. So there is no GREED or FEAR involved.
5) They can immediately smell a scam if they receive a SMS offering Land or Apartment at Rs. 10 per sq ft.
6) They know location is important. They will not buy land or apartment in the middle of nowhere, even if prices are cheaper there.

Why most people lose money in stocks

1) They do not check the basic fundamentals of the company they are investing in.
2) They are not serious about investment, because of relatively small sums involved (Rs. 10k to 1 Lac)
3) They are always invested for short term (1 to 6 months)
4) The value of the investment changes every second, during market hours. The 1 Lac investment shows up as Rs. 1.8 lacs (makes investors GREEDY) and sometimes shows up as Rs. 30,000 (makes investors FEARFUL)
5) They will act on a tip received via SMS and invest in a company called "Ullu Software" whose share price is just Rs. 10
6) They do not know that a company's balance sheet has to be strong. They will invest in 2nd or 3rd or 4th tier companies, because they appear cheap.

[drsingh]

Originally Posted by J.Ravi

Today, I added the following scrips purely for dividend yield:

100 RECLTD @ 134.20 [current dividend yield: >12%]

100 PFC @ 123 [current dividend yield: >11%]

Are you sure about the figures? REC has split in half .And the numbers should be near 5-6% yields.

Originally Posted by drsingh

REC has split in half .And the numbers should be near 5-6% yields.

Yes, agreed. The figures were quoted from moneycontrol.com.

[sinhead]

smartcat- That offers a really good perspective.
And, thanks for the pointers. "Point 2" was applicable to me (not serious... relatively small sums involved). On 2nd thought, I could have made all these mistakes.

[drsingh]

Originally Posted by J.Ravi

Yes, agreed. The figures were quoted from moneycontrol.com.

Guys be careful about figures on moneycontrol and other websites.their software is not totally reliable when it comes to splits,bonus, etc. They almost always mess up the numbers.

Just a few minutes back, I booked profit by selling 360 shares of SREINFRA at ₹ 87 each. I stayed invested in this company since 2006. My sell order for ₹ 87 was executed today only although I was trying in vain from the past few sessions.

[fordday]

Originally Posted by J.Ravi

Just a few minutes back, I booked profit by selling 360 shares of SREINFRA at ₹ 87 each. I stayed invested in this company since 2006.

You remained invested for quite a long period, like true investor.

What was your CAGR for this stock?

Originally Posted by fordday

What was your CAGR for this stock?

My average cost was ₹ 29. The selling price was ₹ 87, i.e., 300% over 10 years excluding dividends. So, CAGR works out to 11.61%, IIRC.

[sreerknair]

Originally Posted by hserus

In all cases - Regular, Growth for the fund options. And I use a for fee financial advisor that I heartily recommend - he tracks my investments and sends weekly statements in PDF format.

Birla Sunlife -

Balanced 95 Fund
MNC Fund

Hi hserus, one quick question - I have some amount invested in Birla MNC for a year now via SIP. The NAV is heading south and most of the reviews are asking to switch to another fund. Looking at its portfolio, do you foresee whether switching is a wise decision ?

[hserus]

You've only been invested a year - depending on which funds you picked I would not recommend d switching

What reviews did you see - any links?

[hothatchaway]

Originally Posted by sreerknair

Hi hserus, one quick question - I have some amount invested in Birla MNC for a year now via SIP. The NAV is heading south and most of the reviews are asking to switch to another fund. Looking at its portfolio, do you foresee whether switching is a wise decision ?

Any reason for investing in sectoral funds i.e. MNC/Pharma/FMCG et al. The mutual fund vehicle is for those who do not have the time nor the inclination to research quality stocks and hence derisk their investment by putting in money in a quality MF. If you have insights into a particular sector, makes sense to up your game by investing in stocks. Else, pick a few diversified/large cap/mid cap MF (Go by ratings on sites like Moneycontrol/Morningstar if you are not able to analyze their asset allocation and decide which one is promising), start a SIP on each and periodically monitor them. Most equity MF will underperform in the short haul

[sreerknair]

Originally Posted by hserus

You've only been invested a year - depending on which funds you picked I would not recommend d switching

What reviews did you see - any links?

Hi hserus, I mentioned it mainly based on the Crisil rating downgrade and the moneycontrol comment (though I have the direct scheme of same fund)

Originally Posted by hothatchaway

Any reason for investing in sectoral funds i.e. MNC/Pharma/FMCG et al.

Hi hothatchaway, I was looking for a mid-small cap fund and based on past performance and few other factors, this was one of the best when I selected it.

May be I became paranoid by seeing the recent fall in NAV.

Added 10 TATAMOTORS @ ₹ 455 to my portfolio, utilizing the crashing of the market.

[alpha1]

Originally Posted by smartcat

Why most people make money in real estate:

In addition to the excellent points that you have made, there is one more.
People get cheap home loans.

If we remove the home loan aspect, most people will not be able to buy houses, and the so called "returns" from "real estate" may also fall down.

In addition, the home loan allows people to utilize the leverage aspect. On his own a person may be able to invest only Rs 10 lacs, but because of home loan the same person are able to invest Rs 50 lacs.

A 10% return on Rs 10 lac investment will always remain less than 10% return on Rs 50 lac investment.

[hserus]

You are not factoring in the fact that you have to repay the home loan and pay several lakhs more to the bank.

And then taxation savings have not been factored in.

Anybody and everybody who bought housing as an "investment" generally bought it using his own money rather than through a loan.

and @J_Ravi sir - please pace yourself the markets may fall a bit more too.

Originally Posted by alpha1

In addition to the excellent points that you have made, there is one more.
People get cheap home loans.

If we remove the home loan aspect, most people will not be able to buy houses, and the so called "returns" from "real estate" may also fall down.

In addition, the home loan allows people to utilize the leverage aspect. On his own a person may be able to invest only Rs 10 lacs, but because of home loan the same person are able to invest Rs 50 lacs.

A 10% return on Rs 10 lac investment will always remain less than 10% return on Rs 50 lac investment.