Category: Finance & Investment

Mid caps and Small caps can crash in 2018

The Mutual Fund companies are a big factor in the market. Because they run the money of the public. And in India, most of the general people invest in mutual funds. These Mutual Fund companies are regulated by the government throughSEBI, Securities and Exchange Board of India SEBI changes it’s regulations from time to time so that the Mutual Fund companies are under control. Therefore SEBI had made some new regulations for the Mutual Funds to keep safe the money invested by the general public.

 

 

The Mutual Fund companies run on the money of the general public. So they try their best to get the highest return on their investment. Because we the public buys Mutual Fund mostly by comparing the return of past two to three years. when the company has a good return in two to three years it comes to the top of the list. So, it is preferred by most people hence they have a high cash flow. And they only need that!   You may think that it is a good thing to thing to earn a high return in a short period. No, it is not good.

 

 

Because in order to get more capital inflow from the public, they try to get more return by investing in Mid Caps and Small Caps. The large caps Mutual Funds invest in many Mid and Small Caps and the Mid Caps invest in many Small Caps. Because it can give them a high return. But there is also very high risk in the Mid and Small Caps. Because Mid Caps and Small Caps are very volatile and unstable. It can be Bearish in no time. And due to the liquidity crunch, it is very difficult for the Mutual Fund companies to sell these stocks. Hence their customers can lose their money.

 

Suppose an old gentleman doesn’t want to take high risk and invested in a large caps Mutual fund. He would think that his investment is safe and earn a decent amount of returns yearly. But the Large Caps Mutual fund may invest that fund in Mid and Small caps and try to earn a high return with high risks. So, it is a form of deception.

 

 

Therefore, the Government and the SEBI has made regulations to control that. From now onwards the Large caps Mutual funds would not be able to invest in Mid and Small Caps funds and Mid Caps fund would not be able to invest in Small Caps funds. In this way, the investor’s money will be relatively safe. And now these MId caps and Small caps hold by the Large and Mid Caps Mutual fund companies would have to sell their Mid and Small caps Stocks in a bulk.

When all the companies will sell their stocks in a short period of time there would be a sharp fall in the prices of the Mid caps and Small caps in the following month of 2018.

 

 

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How can an ordinary people invest in stock market

The stock market is a very scary topic for most people in the world. They simply think that it is just a gamble market. People gamble in the market and they win a large sum if they are lucky. And lose all their money if their luck is bad! This is not the case at all. Stock market rather is a product of hard work. You have to study the different companies thoroughly in order to understand them and to buy their stocks. But that is not all you have to study their portfolio, returns and debts, managerial quality, low price and so on. Usually, it takes very long time to properly understand the stock market. It is really a hard work. Therefore, we, the general people can’t understand it properly and play gamble because we often don’t have time to learn and patience it requires.

 

The world is in a new era today. This is the era of the internet. The Internet is really taking over the world. Today we can’t imagine our world without it. And in near future, it will become an essential thing like food, cloth, and house. It has revolutionized the world mostly in the better way and it will continue to do so.

 

The Internet has also touched the stock market. Now you can buy and sell a stock in a millisecond with the click of a key. You don’t need to go to the banks and follow different instructions, keep a trader and give a large fee. Today you can just go to Zerodha and open a account with a 500 Rs fees. There is not any hidden fees whatsoever. They give the opportunity to trade freely on equity with no fees. And flat Rs 20 on intraday and F&O trades! They have more than 8 lakhs clients and does 8% of daily retail trade volumes across BSE, NSE, and MCX. How amazing it is especially when the banks will charge thousands of rupees in every transaction you make. Because banks charges on the percentage of money traded.

How to open an account with Zerodha? You have to follow a simple method to open an account in Zerodha. Follow the below instructions to open the account:

  1. Go to their website https://zerodha.com/
  2. Click to ‘Open an account’ and then enter your credentials. Your name, mobile number, and email address.
  3. Click the button ‘continue to sign up’. Then you have to create a password and then continue.
  4. Then you can deposit rupees five hundred to open the account.
  5. You have to upload the documents through a computer or mobile device with an internet connection of course. An agent will contact you and then you have to send the required documents to their office by post. And don’t post the documents by ordinary post as it may not be able to reach the destination and you would have no proof in such cases. Always register it to avoid such circumstances.
  6. You can buy from the day you have open the account but you can only sell after your physical documents reach their office.

 

That’s it enjoy the trading and earn a lot of money. If you have any queries and problems then don’t hesitate to call their agent. They are very supportive and prompt to solve your problems. And don’t forget to research on stocks because remember that it is not by luck but by hard work you can get success in the Stock market.
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Rules of Warren Buffet’s to become a billionaire investing

investment

investment

Warren Buffet is the second richest person in the world after Bill Gates the owner of microsoft. Buffet is known as oracle of Omaha. He is an ace investor and chairman of Berkshire Hathaway. He started investing at the age of 11.

The first rule he follow is of saving. Saving as much as you can make you a billionaire. Buffet was born in a middle class family. He begun to sale newspaper at the age of 11 and started saving and investing from then. He quoted that “if you buy things which you don’t need more often then one day you have to sale the things which you most need”. According to him saving is the ultimate strategy and first rule of gaining your financial freedom.

 

Take as an example that if you save and invest 4 thousand per month then in 35 years it becomes 35 crores. How amazing it is! And if you save and invest the same 4 thousand per month for 77 years then guess how much money you will gather? Don’t be shocked that you will have 2 lakh crores! Peace. Don’t be discouraged by the years you have to put in but in reality you can get insane rich much quicker. You have to study, learn and develop your investment strategy to earn quickly.

investment

investment

Buffet says that don’t run for the shiny objects. Because everything that glitters ia not gold. Treat others as you expect from others to treat you at the same manner. He again advice us to live life by thinking that whatever you do today will come at the front paper of tommorow. Keep good contact with everyone because you never know when someone will become useful and powerful. Be truthful and run your business with integrity.

 

For investing purpose he follow this rule strictly. Sale when the price of the share is increasing very much and everyone buying. And buy when the price of the share is going down and everyone is selling. This is a simple and most important strategy. But not easy to execute because it is very hard to buy when everyone is selling and in panic. But you have to be disciplined in order to learn and success investing.