TRADING Vs INVESTING - PART 4 - SOUND INVESTING METHODS

1 thg 8, 2021

In the earlier part, we talked about the IPO route to invest and earn listing gains and then letting the profits turn into possibly a good long-term investment - the subject of course to the ever-elusive allotment being honored by the company in question.

For example, I did not get an allotment of Zomato Shares and lost the opportunity to lock in 80%+ listing gains. Those who read and watched the video and of those who were lucky to have been allotted; would have made good gains.

However, not everything can be left to lady luck. We can develop a process that suits us well and aim for the long-term goals of building wealth via investment and also generate a good amount of dividend income. And if the company in due course may also reward via bonus/splits/buy-back, it would be an added advantage.

Contrary to some beliefs, it is possible to make money grow by being actively away from the stock market as well. How is this possible and where do I then end up investing?

If you Google it, you will find several avenues of investment so I will let you do that at your convenience. My focus is on activating your mind on how you could find your approach in the instruments that I believe are good for investment and long-term appreciation.

This is how I would have approached investing if I was around 30-35 years of age [assuming a steady cash inflow from any source]:

Invest in ETFs [Exchange Traded Funds]
Nifty
Bank Nifty
Gold
Invest in Nifty Bees, Bank Bees.
Invest in PPF, NPS.
Invest in stocks of companies that manufacture / are involved in items of daily consumption.
Invest in stocks of companies that have a bright future on account of some actions that they propose to take - Electric Vehicles.
Invest in Medicine / Pharma and related companies.
Invest in IT companies.
Invest in companies that pay regular dividends and the return in better than that of FDs.
Invest in instruments that are now opening up to the retail investors [please watch the attached video to know more about it].
Invest in a start-up that is run by someone you know very well - remember, personal relationships and investor-start-up relationships should be managed well.

I have not included Mutual Funds as it is known to all. Please remember that MF investments are also subject to market risks and there is no fixed return.
The above investments could be made by way of:

Systematic Investment Plan or SIP
By way of lump-sum purchases.
Top-up the SIPs by way of ad-hoc investments at an appropriate time - even though I have mentioned this, there is no right time to make an investment.
From what I know, via the Zerodha broking platform, it is possible to “gift” all exchange-traded instruments. So the next time you want to gift someone on an occasion, think of helping him/her get started on investing by gifting something that will help the recipient.

I encourage you to spend some time on knowing more about each of the above so that you familiarize yourself with the instruments/opportunities. Although there are many well-qualified and competent Financial Advisors, I believe that there is no one better than me who knows how important my capital is to me. So take the best step to be your own CFO and in due course of time, you will be suitably rewarded for the actions taken by you.

The above is good for this week. I will be back with some more inputs next week.

I would love to read your feedback and if you have something interesting to share, please feel free to do so for the benefit of all readers.

Thank you & Happy Investing!

Umesh