Go Back   ManagementParadise.com | Management & Business Education Learning Platform Quiz , Marketplace and Community games > Stock Markets Tips & Gyan !!

Find out your IQ - Investment Quotient

Discuss Find out your IQ - Investment Quotient within the Stock Markets Tips & Gyan !! forums, part of the Quiz , Marketplace and Community games category; Find out your IQ - Investment Quotient What is stock market, is it speculation den or place to invest and ...

Reply

 

Thread Tools Display Modes
Find out your IQ - Investment Quotient
Old
 (1 (permalink))
Praveen Gurwani
love_gundu22 is just really nicelove_gundu22 is just really nicelove_gundu22 is just really nicelove_gundu22 is just really nicelove_gundu22 is just really nice
 
love_gundu22
Consultant at Capgemini
Management Paradise Member
 
Institute: Smt. CHM College
Status: Offline
Posts: 1,131
Join Date: May 2006
Age: 33
Arrow Find out your IQ - Investment Quotient - December 23rd, 2006

Find out your IQ - Investment Quotient

What is stock market, is it speculation den or place to invest and create wealth? Answer to this lies in how we deal with it. If we consider stock market as place to make fast/quick money, it is speculation den. When equities rise most of us feel that to make money we should follow “high risk, high return” strategy. In reality we are following “high return, high risk” strategy. If we push our mind we will find subtle but important difference.

Does high-risk mean high return?

If we are feeling that by taking high risk we will “necessarily” get high return, we are kidding ourselves. Word risk means probability of loosing money. High risk means high probability of loosing money. Therefore if you are willing to accept high probability of loosing money, you ‘may’ get high returns.

In long run – over a period of 7/9 years – equity markets are place to get high return with low risk. On the other hand any kind of speculation is high risk, low (no) return game.

Are you a speculator?

Another litmus test to find out whether we are considering stock market as speculation den or place to create wealth is the way we get anxious about our investments. If our investment horizon is more than 7/9 years away, we will not panic even if equity market falls for 7 months. On the other hand if we are speculating, 7 bad days/weeks will give us anxieties. If 7 days/weeks fall give us anxiety, we are in speculation mode.

Lastly, if we start asking anyone who even remotely uses letter “s” of stock market, his/her views on near term movement of equity market, we are in speculating mode. We want to inquire about the near term movement because – irrespective of what we say - we have purchased equity for short term. This is giving anxiety and we want someone – whom we want to consider as an expert – give us assurance. The way no one can predict the outcome of speculation, in near term no one can predict movement of equities.

Reason to discuss above behavior is because as human beings, we are intelligent breed and we do not allow ourselves to admit we are speculators. Therefore it is important to consider above and verify whether we are considering stock market speculation den or place to create wealth.

How to earn high returns?

Rome was not built in a day. No matter how hard we try, we will not be able to create wealth quickly. It will take decades before “stable” wealth is created.

Invest in equities if your financial goals are more than 7/9 years away. You may either invest directly into equity markets, if you have the skill and time. Alternatively consider equity mutual funds. In last couple of years we have got equity mutual funds with varied investment philosophies e.g. index funds, large cap funds, mid-small cap funds and contrarian funds. Soon we will have global equity funds. Mutual funds allow ease of operation, diversification, professional approach etc. You can invest in these funds either lump sum or you may also consider investing in a systematic way over a period of time.



- Gaurav Mashruwala

The author is a Certified Financial Planner. He may be reached at [email address]
Advertisements



Imagination is like a magic carpet.. It can take you Anywhere..............


Be Creative, Learn about-
To view links or images in signatures your post count must be 0 or greater. You currently have 0 posts.






To view links or images in signatures your post count must be 0 or greater. You currently have 0 posts.


Ideas Create.... Values Protect!!


To view links or images in signatures your post count must be 0 or greater. You currently have 0 posts.

Praveen(love_gundu)


To view links or images in signatures your post count must be 0 or greater. You currently have 0 posts.
Friends: (5)
Reply With Quote
The Following User Says Thank You to For This Useful Post:
Reply

Bookmarks

Tags
find, investment, quotient
Related to Find out your IQ - Investment Quotient
 

Similar Threads

Thread Thread Starter Forum Replies Last Post
Spiritual Quotient AKANSHA Human Resources Management (H.R) 1 February 28th, 2016 04:07 PM
mr notes bms find out diff mrunal Marketing Research 3 August 17th, 2007 09:39 AM
‘WE CAN FIND DEALS EVEN IN THIS MARKET’ nick18_in Articles !! 0 December 10th, 2006 03:00 PM
how to find a lost wife nick18_in LaUghTeR AccEleRatED , Just CHILL !! 0 November 5th, 2006 07:41 PM
Can you find out? rohit_pn LaUghTeR AccEleRatED , Just CHILL !! 2 May 20th, 2006 03:21 AM
 


Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is On
Trackbacks are On
Pingbacks are On
Refbacks are Off


ManagementParadise.com is not responsible for the views and opinion of the posters. The posters and only posters shall be liable for any copyright infringement.



Search Engine Optimization by vBSEO ©2011, Crawlability, Inc.