Investment a Rocket Science?

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Wall Street loves to use confusing terms to make you think only they can do what they do. Or even better, for you just to leave them the fuck alone, thanks to The Big short movie for this fuckin dialogue. 

Overtime we have seen an increase in so many assets where money can be parked namely stocks, Mutual Funds, Precious Metals, Bank FD, Real Estate, Bonds, Moneyback Insurance etc. 


  1. 1. Equity (Stocks) – Large cap, Mid cap, Small cap, Futures & Options 

  1. 2. Mutual Funds (SIP, Lumpsum) – Equity, Debt, Balanced funds, ELSS 

  1. 3. Bonds – Corporate Bonds, Government Bonds 

  2. 4. Section 80C Investments – Equity Linked Savings Scheme, Public Provident Fund,         National Saving Certificate, EPF, NPS, SSY etc. 

  1. 5.Insurance Policies – Endowment, Whole Life, Health cover, Term plan. 

  1. 6. Deposits – Savings account, FD, RD 


  3. This thing gets More confusing when you account for time horizon, Tax advantage & Risk Appetite. The only reason we hear this 😂 Mutual Fund investments are subject to market risk please read the offer documents carefully before Investing says the disclaimer in every advertisement of mutual fund. 


  5. There is an extremely interesting behavioural economics on the concept of choices it outlines how more choices confuses us rather than enlightening us. choice involves decision making. It can include judging the merits of multiple options and selecting one or more of them. You might be thinking about how having more options can be inimical then let me tell you – let's say you have to choose from pizza and burger you might think for a while and then go with the one of your likings. Now suppose you are asked from 30 different variety of foods to choose from this will take more time than the previous one and you might end up getting confused right? 



  7. Why investing looks rocket Science?


  9. Probably because we are not educated about money the reason being that government does let us teach that subject, government tell us what we can teach how we can teach. Most of us follow friends/colleagues/relative to park money this can be hazardous your friend invested in ABC stock and made a 2x return in a year doesn’t mean you will also end up making the same return your time of entry into the stock might be different from that of your peer. Remember Yes bank (I am still crying).   


  11. Most of the times investment decision are not that tricky as it appears. Sometimes it's more like an Occam's Razor meaning the simpler one is more likely to be correct. Owing to its irrational nature, people often assume that investing in the stock market is a rather difficult affair. Many even compare it to gambling and consider it impossible. With the amount of negative opinions regarding the stock market, it seems like a place where everybody loses. 

    Investing is not rocket science and investing in the stock market is relatively easy to manage if you do it the right way. Your mindset is the one stopping you from investing and it will be the one that will help you invest. Everyone has their own opinions about the market and a lot of people make it difficult for themselves, more than necessary. There will always be a range of opinions as to the future direction of interest rates, trade policy, currency movements and hundreds of other economic and political factors which influence how investors behave. The news media and indeed just about anyone we meet or speak to may have an opinion. However, we are under no obligation either to listen to them or worse, to act based on those opinions. 

    As Buffett says, “You don’t need to be a rocket scientist. Investing is not a game where the guy with the 160 IQ beats the guy with 130 IQ.” 
     

     

     




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