Thread by @VidyaG88

1/14
* Some practical tips on #PersonalFinance & #Investment *

Met someone who lost heavily in markets( sizeable amt) which makes me write this thread .

DISCLAIMER : There are exceptions always.However the chances of us being in that exception is rare !🤷 Hence the thread.

2/14

Pls DON'T ENTER markets without ensuring you have
- An Emergency Fund in place
- A good comprehensive Life & Health insurance policy for all .
- Term Insurance ( especially if taken a house on loan)

More details given in the old tweet.

https://twitter.com/VidyaG88/status/1254279111763062784?s=19

3/14
* INVEST SURPLUS ONLY *

Consider investing in markets as money locked in ( like in a PPF account) for a few years atleast & THEN decide how much money you CAN AFFORD TO LOCK IN.
Else we may have to sell ( even a good)stock at lower price BECAUSE we need money urgently .

4/14
* Please SAY NO TO F&O *

Who doesn't want quick money ! 🤷
But then this is also the EASIEST WAY to LOSE all our money ( however intelligent we are ! 😏)
A relative lost 40lakhs in 10days thanks to the itch to earn some quick bucks!!
Learn to say NO often.

5/14
* SAY NO TO #LEVERAGE *

We think we can deploy the loan money into markets & earn some quick bucks by short term trading / intra day & use that effectively .
Again thanks to Murphy's law ,this happens ONLY to the people we know ! When we try such stunts it backfires 🤷

6/14
We often buy a scrip for S.T based on NEWS thinking the stock will surge due to the recent developments .
But we find the stock goes down after we purchase it !!🙄

Reason being the NEWS IS ALREADY priced in & we RETAILERS are the LAST to know about it !
Vice versa also .

7/14
* #AssetAllocation matters *

Equity is good no doubt,but pls draw up a tentative Asset allocation plan .
STICK TO IT !
#Diversification is not just purchasing different Equity! There is so much more to it.

Take the help of experts if needed but get this done ASAP.

8/14
* #PositionSizing matters*
Most of our gains would be from a handful of stocks . Now the overall portfolio return would depend on how much exposure one has to winners over losers .
Hence we must also average up our winners consistently .

9/14
* Pls DON'T TIME markets *
Returns will always be lumpy . Don't have unrealistic expectations.

Don't sit & predict bottom .Deploy cash sensibly .
Regular #SIP must be done . Lumpsome investments can be done if expertise is there ( most of us aren't experts!) 😬🤷

10/14
#READ a lot ! Don't just search Twitter for tips !

Only technical analysis won't help us . ( It does to an extent )IMHO the Psychological aspects matter more
especially in current times of high Social Media use.

For history repeats itself , given our inherent nature.

11/14
* The craze for making quick bucks from #IPO *

Pls try to AVOID IPO's.
Many retailers fall prey here & end up either making a loss or getting their capital stuck big time.
It's become a gamble now IMHO.
Have written in detail on this earlier on .

https://twitter.com/VidyaG88/status/1300027420762800128?s=19

12/14
If we understand ourselves then the major battle is won for we won't easily fall victim to NOISE

* MOST IMPORTANTLY we will KNOW what we DON'T KNOW and hence will STICK to our investment philosophy ( whatever it be ) and select stocks .
Churning helps no one.

13/14

Study the stock thoroughly BEFORE you invest . Purchase it if you are decently sure of it & ONLY MONITOR the stock afterwards periodically .

But we do the EXACT OPPOSITE!🙄
Hence we panic the minute contrary opinions float in .
CONSENSUS cannot happen in markets!

14/14
These are just a few things I shared based on my discussion with the friend.
Ultimately MONEY IS NEEDED TO MAKE MONEY & hence capital protection triumphs everything!!

Hope it helps someone . 😇🙏

* THE END*

@dmuthuk
@FI_InvestIndia
@position_trader
@RichifyMeClub