Investing directly in the stock markets is a full-time activity. It isn’t. There is research to be done pre-investment and post-investment. And research on a company does not just involve knowing its business. The investor is expected to master several subjects i.e. prospect of the sector, other companies operating in that sector and how the company (under review) is superior to them. The investor is also expected to study the economic and political climate of the country to gauge the bearing they can have on the sectors and companies in them. Having done this research before investing. The investor is expected to continue doing it even after he has invested in it so as to ensure he is invested in the right company companies.
So by researching on these areas all by himself, the investor is replicating the efforts of an entire then he can consider taking up investing as a full-time activity. Of course, he will first have to consider resigning from his present job!
On a more serious note, if you believe that you can take out time from your work to invest directly in equities, then it is advisable to invest in proportion to your free time . The free time will prove critical in tracking the companies that you wish to invest in . for instance , if you are very busy, then ideally you must either not invest at all in equities or invest sparingly . because you don’t have sufficient time to track the companies. Moreover , if you are busy today and expect to get even busier tomorrow, then reconsider whether you should be investing directly in equities at all no point in starting something that you will unlikely find the time to finish. Conversely, investing via the mutual funds route is far less time consuming . sure, it might take a while to select the right mutual funds how ever beyond that , a better part of the responsibility lies with the fund manager and your financial planner.
Investing skills
If you have the time to take up invest n then you have cleared the first hurdle. There are other hurdles to be cleared like investment skills. A successful fund manager hasn’t got where he has, only because he has the time to invest; he has something even more scarce- the skill and knack of investing. And the skill sets to invest are not acquired overnight. Fund managers earn their spurs over the years after going through several market trends and cycles and after making several mistakes, so apart from the time factor , investing demands a lot of skill and experience.
Access to research
Most investors who wish to take up investing as a full-part-time activity are likely to hit a roadblock in getting unrestricted access to quality research. While conventional wisdom suggests that the annual report should provide sufficient in this regard, the bad news is that the annual report is just the starting point. For more for more information you have to read up extensively on sectors and companies in those sectors .whiles some of this information could be available for fee , the quality inputs are usually available for a stiff fee .
So by researching on these areas all by himself, the investor is replicating the efforts of an entire then he can consider taking up investing as a full-time activity. Of course, he will first have to consider resigning from his present job!
On a more serious note, if you believe that you can take out time from your work to invest directly in equities, then it is advisable to invest in proportion to your free time . The free time will prove critical in tracking the companies that you wish to invest in . for instance , if you are very busy, then ideally you must either not invest at all in equities or invest sparingly . because you don’t have sufficient time to track the companies. Moreover , if you are busy today and expect to get even busier tomorrow, then reconsider whether you should be investing directly in equities at all no point in starting something that you will unlikely find the time to finish. Conversely, investing via the mutual funds route is far less time consuming . sure, it might take a while to select the right mutual funds how ever beyond that , a better part of the responsibility lies with the fund manager and your financial planner.
Investing skills
If you have the time to take up invest n then you have cleared the first hurdle. There are other hurdles to be cleared like investment skills. A successful fund manager hasn’t got where he has, only because he has the time to invest; he has something even more scarce- the skill and knack of investing. And the skill sets to invest are not acquired overnight. Fund managers earn their spurs over the years after going through several market trends and cycles and after making several mistakes, so apart from the time factor , investing demands a lot of skill and experience.
Access to research
Most investors who wish to take up investing as a full-part-time activity are likely to hit a roadblock in getting unrestricted access to quality research. While conventional wisdom suggests that the annual report should provide sufficient in this regard, the bad news is that the annual report is just the starting point. For more for more information you have to read up extensively on sectors and companies in those sectors .whiles some of this information could be available for fee , the quality inputs are usually available for a stiff fee .
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