Welcome !! I am not the one who frequently visit blog site. Its the first time for me pen down my experience with Money, Saving and In particular with Stock Market.
The idea that I am going to share with all the reader is based on Simple Old saying - Each Drop is important in filling the Bucket.
Stock market as we all are aware is about dynamic pricing and prices do fluctuate based on Rumours and good fundamentals both. There are days when fundamentally good news do not have an impact on the price of the stock. The stock market is a mix of Sentiments, Rumours and Fundamentally good news.
A common man gets attracted to stock market because of the movement of price and with a hope that He will put his saving and will give him positive returns which may not be always the case. One fact of the market which may definitely have influenced almost 100 % investor is favour of luck in the first deal. Almost all people who invest in Stock would have had made profit in the first deal.
It is difficult to time the market and a common investor gets trapped because of lack of knowledge of the Market. It is always wise to go through a Professional advisor who can help in figuring out the risk you are OK to take based on the age and circumstances you are in.
For a retail investor best thing could be through Mutual fund as it comes with professional advise and at the same time he need not track the market on the daily basis. Mutual fund take off a lot of risk from the investor but can not guarantee a good return because of the dynamic of the market.
The question arises is What is best for Retail Investor who has small saving and would not like to see his saving getting diminished with time.
There is a new scheme launched by Mutual Fund which cuts down the risk even further and helps you average your purchase on daily/weekly basis.
The sceheme is commonly known as Systematic Transfer Plan; Through this investor can transfer money by selling in a particular scheme and buy in a risk scheme which would yield more result.
It is always wise to put the money into Risk Instrument recurringly so that Risk gets minimized and chances to loose money also comes down. The STP is best worked with a combination of Liquid and Equity fund. Equity which is a risk intrument can be bought by selling small amount in liquid fund which gives assured small return.
Investor can think of Inveting Rs. 20000 in Liquid fund and then through an instruction can transfer to equity fund in 40 equal installment of Rs. 500 each in to the Equity fund. This will help cut down the risk as investor is not investing the whole Rs. 20000 in a single day rather investing in 40 installment and thereby risk will come down and purchase cost will come down.
More over the Equity scheme in this option can be chosen as with dividend payout so that when dividend is declared; investor can take it out and reinvest the same through STP.
Definitely this plan is best for people who want to make the retirement plan of their own; If a person at the age 25 invests Rs. 500 daily in the above fashion for 10 years then this scheme will be self sustaining in 10 years (Assuming Dividend declaration of 10%).
Queries and Feedback are welcome.. Happy Investing...
The idea that I am going to share with all the reader is based on Simple Old saying - Each Drop is important in filling the Bucket.
Stock market as we all are aware is about dynamic pricing and prices do fluctuate based on Rumours and good fundamentals both. There are days when fundamentally good news do not have an impact on the price of the stock. The stock market is a mix of Sentiments, Rumours and Fundamentally good news.
A common man gets attracted to stock market because of the movement of price and with a hope that He will put his saving and will give him positive returns which may not be always the case. One fact of the market which may definitely have influenced almost 100 % investor is favour of luck in the first deal. Almost all people who invest in Stock would have had made profit in the first deal.
It is difficult to time the market and a common investor gets trapped because of lack of knowledge of the Market. It is always wise to go through a Professional advisor who can help in figuring out the risk you are OK to take based on the age and circumstances you are in.
For a retail investor best thing could be through Mutual fund as it comes with professional advise and at the same time he need not track the market on the daily basis. Mutual fund take off a lot of risk from the investor but can not guarantee a good return because of the dynamic of the market.
The question arises is What is best for Retail Investor who has small saving and would not like to see his saving getting diminished with time.
There is a new scheme launched by Mutual Fund which cuts down the risk even further and helps you average your purchase on daily/weekly basis.
The sceheme is commonly known as Systematic Transfer Plan; Through this investor can transfer money by selling in a particular scheme and buy in a risk scheme which would yield more result.
It is always wise to put the money into Risk Instrument recurringly so that Risk gets minimized and chances to loose money also comes down. The STP is best worked with a combination of Liquid and Equity fund. Equity which is a risk intrument can be bought by selling small amount in liquid fund which gives assured small return.
Investor can think of Inveting Rs. 20000 in Liquid fund and then through an instruction can transfer to equity fund in 40 equal installment of Rs. 500 each in to the Equity fund. This will help cut down the risk as investor is not investing the whole Rs. 20000 in a single day rather investing in 40 installment and thereby risk will come down and purchase cost will come down.
More over the Equity scheme in this option can be chosen as with dividend payout so that when dividend is declared; investor can take it out and reinvest the same through STP.
Definitely this plan is best for people who want to make the retirement plan of their own; If a person at the age 25 invests Rs. 500 daily in the above fashion for 10 years then this scheme will be self sustaining in 10 years (Assuming Dividend declaration of 10%).
Queries and Feedback are welcome.. Happy Investing...
