The Most Authentic Guide on Personal Finance and Investments


Words of Wisdom : "There are only two lasting bequests we can give our children... one is roots, the other wings." ~ Steven Covey

You think you can beat Roger Federer!

Do you really believe you can beat Roger Federer or Viswanathan Anand? Or for that matter even a player whose world-ranking is as low as say 10,000?

Never. Unthinkable. Impossible.

Fair enough! You may not have the right skills. You have not been coached for it. You haven't put in years of training into it. So, it is but natural that you cannot win.

Then why... and I repeat WHY... do you believe that you can do a better job than a professional fund manager?

Stock market is a fascinating place. Naturally. Where else (apart from a casino or a lottery) can you expect "huge" money in "quick" time? Therefore, it attracts hoards of newcomers everyday... of course, with disastrous consequences.

Why?

Let me come to the "myth" of stock market later in the article.

First, I would like to discuss your chances of winning against a professional fund manager.

He has the right educational qualifications. You don't.
He had the right professional experience. You don't.
He can understand balance sheets and economic numbers. You can't.
He is supported by a qualified and professional research team. You are all alone.
He often visits companies and meet their managements. You merely watch them on TV.
He is into this job 24*7. You barely spend a few minutes.
He has adequate corpus that facilitates diversification. Your capital is scarce.

Thus, the dice is loaded totally in favour of a professional fund manager. As such, don't you think it is foolhardy for you to even think of  "directly" investing in stocks? Wouldn't it be a lot smarter idea to place the same money with the professionals? [Must read: 'Become a crorepati - safely and surely - with...']

It may be good to be adventurous. But it is definitely not good to be reckless. Surely the odds need to be much better than this, before you venture into the stock market directly.

Think about it. After all, it is your hard-earned money which is at risk.

mutual-fund-manager
Investing in stocks? You simply cannot beat the professional fund manager.

Now coming to this "myth" of "huge" gains in "short" time!

Yes, on the face of it, shares can deliver enormous profits within days and months. But this is a mirage. It happens; but rarely. You may be "lucky" once or twice. But 98-99 times out of 100 you will lose money chasing quick returns.

No. Stock market is not an ATM machine.

Besides, you are seriously mistaken if you think brokers, advisers or fortune-tellers know what stocks will make money. Well, have you ever wondered that if they really knew, why will they be happy earning a mere 0.1-0.2% brokerage while you make all the profits? Wouldn't they simply sit at home and mint money?

So does it mean that stock market is all nonsense and just a gambling adda?

Not at all. 

In fact, it is one of the best wealth creating opportunities. But it needs the "right approach".

It is a proven fact that
... investing in stocks requires professional expertise and competence
... on an investment time-frame of 10-15 years no one has lost money in stock market
... those who have shown patience and discipline have been amply rewarded 

[Must read: 'Are you missing out on mind-boggling returns?']

So the question here is pretty simple... do you want try your luck, against all odds, or do you want to make good and consistent returns?

Think about it. After all, it is your hard-earned money which is at risk.

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Ignorance is like a SIGNED BLANK CHEQUE... anyone can MISUSE it.

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