"You must be very rich lady these days!" said Mrs. Nair, my neighbour, the moment she entered our house.
"?!?!" Alarmed and confused with exaggerated sugary sweet tone from someone who is known to be a snob, I tried to figure out what was coming.
"Stock market has reached 20,000 points na!!"
"Yeah, it has. So?"
"Tell me, which stocks I should buy? " she asked with glint in her eyes.
"Auntie, I am not a professional advisor on equities and currently, I am not buying any stocks."
"Oh come on, give me few tips. Don't I know how well you are doing in stock market?" She tried to cajole.
"Investing at current level is irrational and there are many factors responsible for any bull run like sentiment of the stock market, liquidity, FII flows, etc. Investing in direct equity needs good research and it is a risky asset class. Besides, stock market is very volatile these days. I am not sure if it is wise to enter the market at this stage"
"Oh! Don't you worry about that! You see, I don't mind taking risks. One has to take risks to earn money after all hain na?!"she persisted with big grin.
"Maybe, that is true but not before assessing every facet of the risk involved. I am an investor not a trader. My profile as long time investor would be completely different than someone playing the market for a short time."
"Profile??What profile???!!!"
"One needs to understand few basic things like what is the objective of the investment, time horizon one is looking for, risk appetite of the investor etc. before taking the plunge."
"Arre, don't bother about all those technical things dear. Who has got time to get into all that? I just want to take advantage of this teji (strong bull-run) and make some quick money. During last teji, my cousin Rajam earned big money and she now moves in a brand new sedan and has also booked a three bedroom flat in Banglore! And all she did was to consult her friend, who deals in shares just like you."
"Wish it was that easy auntie."
The conversation continued for next couple of minutes and I tried to convince Mrs. Nair to participate in stock market through SIP route once the market undergoes correction so that she would get the feel of how stocks behave. But Mrs. Nair left disappointed with some regret on her face for bringing bowl of payasam that did not earn her any "tip" for stocks.
Every time the stock market goes up, I end up having similar conversations with lot of people; friends, relatives, acquaintances and neighbours who just like Mrs. Nair, wish to invest in stocks without any prior knowledge or understanding of equity market. The difficult part is to convince them how investing in any asset class is not as simple as it sounds and that one needs to be extremely careful, prepared with thorough knowledge and understanding of every investment option.
The major blunder people end up doing is to drool over reverie of making fortune in stocks, as if stock market is some magic wand to help them gain quick, handsome returns in short span. I am shocked by the mindless way people invest in 'hot picks" because some friend/neighbour/colleague/relative recommends it! They invest recklessly as if oblivious to the fact that stock prices are subjected to erratic and random fluctuations depending on so many factors.
The other day while going for work, my taxi driver overheard my conversation about stocks and he was curious to know how he could participate in the bull rally. It is not only people like him from lower financial strata and less educated class but also people from effluent, educated class make this enormous mistake to jump in stocks lured by greed and end up in financial harakiri.
I am personally very bullish on equity as an asset class but to expect it to create magic as per my fancy would be a wrong premise. There is difference between creating wealth and making money and to create wealth in ethical way it takes time. Like life, there are no short cuts in stock market! Greed is good but not when it becomes unhealthy!
"One of the funny things about stock market is that every time one person buys, another sells and both think they are astute." William Feather
The conversation continued for next couple of minutes and I tried to convince Mrs. Nair to participate in stock market through SIP route once the market undergoes correction so that she would get the feel of how stocks behave. But Mrs. Nair left disappointed with some regret on her face for bringing bowl of payasam that did not earn her any "tip" for stocks.
Every time the stock market goes up, I end up having similar conversations with lot of people; friends, relatives, acquaintances and neighbours who just like Mrs. Nair, wish to invest in stocks without any prior knowledge or understanding of equity market. The difficult part is to convince them how investing in any asset class is not as simple as it sounds and that one needs to be extremely careful, prepared with thorough knowledge and understanding of every investment option.
The major blunder people end up doing is to drool over reverie of making fortune in stocks, as if stock market is some magic wand to help them gain quick, handsome returns in short span. I am shocked by the mindless way people invest in 'hot picks" because some friend/neighbour/colleague/relative recommends it! They invest recklessly as if oblivious to the fact that stock prices are subjected to erratic and random fluctuations depending on so many factors.
The other day while going for work, my taxi driver overheard my conversation about stocks and he was curious to know how he could participate in the bull rally. It is not only people like him from lower financial strata and less educated class but also people from effluent, educated class make this enormous mistake to jump in stocks lured by greed and end up in financial harakiri.
I am personally very bullish on equity as an asset class but to expect it to create magic as per my fancy would be a wrong premise. There is difference between creating wealth and making money and to create wealth in ethical way it takes time. Like life, there are no short cuts in stock market! Greed is good but not when it becomes unhealthy!
"One of the funny things about stock market is that every time one person buys, another sells and both think they are astute." William Feather
