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Got this nice piece in an article. I think the same holds for direct stocks vs. mutual funds.
My view is that anybody who is starting off with equities should not use more than 5 pc of the amount they intend to commit through the direct route. (1/n)
Got this nice piece in an article. I think the same holds for direct stocks vs. mutual funds.
My view is that anybody who is starting off with equities should not use more than 5 pc of the amount they intend to commit through the direct route. (1/n)
This is assuming that one knows some basics of investing. You should scale up direct stocks over time if you know you are not losing money terribly. Some "tuition fees to market" / losses are understandable. Only when you get better, exposing more money makes sense (2/n)
The rest of the 95pc of money will be working hopefully in the hands of a decent MF manager. For no reason should goals be jeopardized by making losses on a large fraction of investible capital in direct equities when you are not good yet. (3/n)
If you want intellectual stimulation, of which there is plenty in direct stocks, but are not ready yet, read an engaging book instead or solve a Sudoku puzzle. Don't make losses or stop your money from growing. (4/n)
Eventual goal should be to compound better than an MF manager because if you are matching them, you are also spending time to get the same returns that you would have got by outsourcing the job. Is your time worth more? Answer truthfully. (This is spoken of in Minervini's book)
