Some of My Thoughts On Financial Investments

Some of My Thoughts On Financial Investments

I have been silently observing, reading, thinking & listening as to how to diligently invest money. To bring out clarity to the cloud of ideas on the subject. I wish to think out aloud my thoughts by typing it out on my computer. Surprised by the easy flow of chain of thoughts, which my mind would have collected over the years, I start on the subject.

MONTHLY RETURN SCHEMES

· Do we need a monthly return? I wonder if earning some money in this way would resign one into laziness and relaxation and would not drive one to work and earn, would kill one’s imagination and creativity because of this security. On the other hand could this monthly income be used to drive a systematic investment plan? This way would we earn more than if we had invested the same in long term growth/dividend scheme? This money could also be used to pay off kids fees and also could be used for partly funding our annual travel plans and scooter petrol bill and shopping.

Ans: Right now I seem to have taken the stance of NOT investing in any monthly schemes. The idea is to let the capital amount invested in mutual funds GROW.

REAL ESTATE INVESTMENT

· Do I need to keep aside some money for real estate investment opportunity? If so how much should we set aside? The risks are fraudulent documents and government acquisitions. Even if the property is a bit inside some by-lane or a bit on the outskirts of this rapidly expanding city, the property is surely to appreciate if the property is near a temple, near a famous builders apartment complex, the property is sure to remain safe because of peoples involvement in the case of a place of worship & a lot of research having gone in to the development of the area in the case of the property developer. Read the newspaper regularly & be on the look out where the developments are about to come, what route it would take, the surrounding areas of that area where the proposed development is about to come, think of the area on both the sides of the route that would lead up to this proposed place of development. On the newspaper this could all be in fine print or could just be a hint but the idea is to take this up seriously and work on it. One could also make use of internet tools such as wikimapia and get the phone numbers & keep in touch with at least a few real estate brokers & friends who invest in real estate.

ABOUT INVESTMENTS IN MUTUAL FUNDs

Always remember the famous small print, ‘that investments in mutual funds are subject to market risks. Please read the offer document carefully before investing’. After our investments are all done & if the market still continues bearish, then there is certainly a risk that our investment money would remain locked for fear of booking/accounting a loss.

About the question whether I should invest all of the money in one go. I think I should invest in different funds of different mutual fund companies in systematic installments spread over a let us say over a 6-month period.

The bottom line: - Any ideal investment would be buy low sell high in the shortest time period.

Graph wise speaking the cost versus time graph would look closer to theEnglish alphabet ‘S’. Ideally buy when the graph is just before the vertical climb and sell them just after the vertical climb. Also, it is not just enough to watch on your screen or your statement sheet the profit that you would stand to gain, but insteadactualize it, if not all, at least actualisea part of your profits.

.

ABOUT INVESTMENTS IN COMPANY SHARES

While the returns from mutual fund are at approximately 15-30 percent, the returns from investing in shares and trading in them look pretty attractive as returns could vary from 10-100 percent or much more. So a reasonable amount especially for my sort of age could be invested in shares. For this a demat account has to be opened at any of the Depository Participants. The savings account at that particular place or at a different bank could be linked to this DP account.