Thread by @tradersushma

There’s a person who has a respectable corporate job, decent earnings, nice family & some good savings kitty parked in FD which he wants to invest in equities now. But he's lacking in financial knowledge & has no time for market research.

Then there’s a full-time trader. All his working hours are dedicated to equity market research, trading & investing. He daily monitors the market, news flow & has good technical & fundamental know how.

Are these two same kinds of investor?

Should they have the same investing behaviour?

Will the style of investment be same for them?

NO, obviously!

Their situations & behaviours are different. They cannot make exactly same financial decisions. Each person is unique with his own unique psychology. Hence their investing styles has to be different. It has to be personal & that’s why the term is “Personal Finance”.

Despite above reasons we can categorise investors based on some common features.

Let’s take example of the 1st investor.

He can be classified as general middle class retail category investor possessing following features:

🔹No time for market research

🔹No knowledge of finance & accounting

🔹 9-6 job

🔹Family responsibilities

🔹Savings are hard earned

🔹Investment has to be conservative with focus on capital preservation

Majority Indian investors belong to this category.

What do these investors do?

Totally avoid equity markets due to lack of knowledge & devoid themselves of creating wealth? NO!

Direct stock picking is difficult & MFs are costly affair.

So how & where do they invest? What's the solution?

MY OPINION ~

For the above category of investors -

SIP in Index Funds/ ETFs is the best solution.

REASON ~

SIP is the best invention in the field of investing. U can learn about this mode in detail in this post.

https://twitter.com/tradersushma/status/1439606210920022021?s=20&t=G1ckiVCjn-YYbE87vvI0vg

ETFs/IFs are the best equity products designed till date. U may read about complete know-how of this product in this post.

https://twitter.com/tradersushma/status/1447238703076679680?s=20&t=G1ckiVCjn-YYbE87vvI0vg

Wealth building is impossible if u shy away from equity markets. But its better to play safe & be more conservative. Also, wealth creation is a long process so it has to be simple & easily implementable.

SIP in ETFs/IFs has both the features inbuilt in them.

That’s all for this thread.

If u found it useful retweet for wider audience. Meanwhile follow @tradersushma for more such investing insights.

Thank you!
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