buy right sit tight

7/27/2019 Buy Right Sit Tight

1/12

B U Y R I G H T, S I T T I G H T B U Y R I G H T, S I T T I G H T

A BEGI N N ER S GU I D E TO IN V ESTI N G


2/12

In the recent past many investors

because their portfolioshave not d

our research on thismatter points

stocks, over-diversification, investinasset classhasoutperformed all oth

should play an important role in o

the long-term. Hence, it'simportan

to equity markets. With this obje

embarked on a new mission the 'M

The aim of the mission isto make

they need to follow to create wealt

You too can create wealth for yours

read through thisshort book on the

get started.

Happy Investing!


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IFFERENT WAYS TO

Investing isputting money aside today

done by investing in a number of asset cla

Wealth creation ispossible through inve

require specialised knowledge and requ

G old, while it hasappreciated sharply i

returnsover long periods, while giving n

Investmentscould be made in financia

and companies or debt instruments

investmentsare made to generally get

with the original capital being reasona

While interest income generally get

appreciate very much asinflation eatsin

A common method of creating wealstock or equities in the stock mar

through dividends. These can be soldover the cost is the a

D


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REATING WEALTH

STOCK MARKET

Trading isbasically escorting a shar

the difference being the profit on t

concentrating on the industry, com

only criterion for purchase and sale.

These decisionsare based on mo

elaborate study. To the trader price

Trading could be intra day, or positi

few weeks. Thisway a trader coul

and hiswealth creation could be th

number of trades.

Trading There are tw o ways of wea

C

&


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While wealth creation through tra

heartening. T he trader ispitted in a

the rest of the world, which isthe m

T he trader haslimited capital and resourcesare infinite. Each trade

from the market to the trader if hisc

he losesmoney to the market. The

if the trader getsall the money from

trader losesall hismoney to the o

limited, the oddsare stacked overw

Experience showsthat 98% trade

very few who make it big through tr

Investing is another waywealth through t


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Trading may be a 100 metre sprint, but

thatswhere Investing comesin. If Trad

Test M atch.

The planning for the game ( in investing

and T20 cricket formats( Trading), the

the aim isto hit out and score asfast as

doesnot matter asthe next batsman ge

In test cricket ( Investing), the aim isto

inningsto reach a sizable score for ones

Investment is something, whic

safety of principal a

RULE NO. 1

Never lose money

INVESTING HA

~ Benjam


7/12

CWhile everyone aimsto make it big thr

Hard work and enthusiasm may be r

counter productive in investment. T

make unknowingly which lead to wea

bear in mind are:

Investment in stocks doesnot requ

make it their whole time profession

Work increasesto take care of the

activity and mindlesstrading.

T here isno plan for the processof w

having a processisgood luck. And as

Profit issimply the difference betwe

price isin the realm of many factor

price iswell within onescontrol.

Dont work for your stocks, let your stock

Hence you not only need to plan your pla

your plan when investing.

Develop a methodology for stock selectionthat you can understand.

OMMON INVESTING


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Have the purchase price to be so attr

attractive return.

Look at businesseswhere you can selook at companies within the indu

competitive advantage and potential

be done very simply by keeping your

Try to find about management integ

way it treatsits top team and mor

management, its ability to adapt to

customers, its creditors. T his ca

information or by talking to su

employeesand other companies.

Never get out of a stproblems. Dont ha

NVESTING BASICSI


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Investing islike playing a test match. O ne

up a huge score over a long duration of

economic environment, industry trends,

least three years and the management

through dividends. Some simple rules to

Study at least three years working results

Look for consistent performance, one y

managed.

The Return on Capital Employed and Ret

Steady performance isnot enough, grow

15% growth in earningsand 10% growth

There isa dividend pricing model for shar

of dividends. In simple terms, it suggestst

price. Secondly, the higher the compoun

price.

Buying a good stock isnot enough. Bu

dependsnot just on the exit price but als

I f you dont have the time to study you should take the advice of your in a Portfolio Management Schem

NVESTING GROUND I


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Some of the biggest fortunes hav

invested wisely and held on for year

the worlds richest men has madinvestmentsfor decades. T he mora

Warren Buffett in thiscontext hassaid

Steady uninterrupted investments in

compounding. Albert Einstein once s

Steady well chosen investments

permanent losses. Buy a basket of

industriesand hold on for long period

A n investor has to do a smavoid major mistakes to

Compounding is the eig

UY RIGHT & SIT TB


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Here are some compounded annu

companiesby holding on for 20 years

In addition to the above steady grow

companiespay dividendsperiodically

2% of the current market value of

thought out policy of dividend payo

move in line.

*T he stocksmentioned above are to illustrate a point. Pa

doesn't constitute anyadvice or recommendation from M o

discretion or consult a financial advisor. Personnel of Mot

short position in the stocksmentioned above.

HE POWER OF INVET

Berger Paints

C ipla

Eicher M otor

HDFC Ltd

HD FC Bank

Hero Honda

Asian Paints 25%

31%

30%

30%

23%

25%

28%


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UMMARY

Owning a portfo

stocks in non-cylike owning an o

trees. It keeps yoregular supply oland on which th

continues to app

Happy Inve

S

buy right sit tight

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