In general, I have observed that it is easy for us to say, “I can do this”, “I will do this”. We tend to always say “yes” or “may be” for almost anything. Whether directly or indirectly, we hesitate to say “explicit no” for various reasons. Some of the reasons are; we want to keep doors open for us in future, we are not sure of certain things, many times somebody said so it could possibly have some bearing, on many occasions its just does not effect me so haan bolne mai kya jata hai, etc, etc. Same way we apply similar philosophy for investments (or trading).
Almost all of us have some strategy, some technique, and some approach, that we believe works. I am in the same boat. We jump on to something at a drop of a hat hoping it will work. Here also, the opinion or reason is so strong, we find it hard to say “no”. Reading few lines we tend to believe it will work.
I receive emails requesting my thoughts or opinions about a particular stock. Many times its just a one liner asking about the particular company, many times with certain news events, and many with little blurb about the company. If I do not respond in less than a week, then you should consider it has been ignored. Lately, I have bunch of emails regarding real estate companies. Is there an reason why suddenly so much interest in real estate companies? Continue reading rest of this article…
Gold is going bonkers. At present, all it knows is how to climb up. Central banks around the world seem to have caught the bug of buying gold. China wants it, India bought it, Sri Lanka bought it, Russia openly expressed interest, and probably few more. One common theme in all central bankers buying gold seems to be the desire to maintain the value of its assets. Since the continued supply of printed dollar is flooding the global markets, individual nations believe there will be reduction in value of dollar. And hence these central banks want to hold their assets in gold (rather than dollar). Few other factors that one can think of are as follows:
One of the most neglected aspect do-it-yourself investors is performing a realistic assessment of their portfolios. I have adopted a very disciplined approach to make sure I follow my quarterly regime of reviewing the progress. First step was to check out the status. Second step is to understand risk, and third step is to make changes (or execute or re-balance if necessary).
Any investor investing for long term (i.e 10+ years) must use the principles of asset allocation and diversification in their portfolio management process. These are two aspects that help investors to manage risk of investments. This has been said many times, presented many times, and we individual investors still continue to make mistakes. On a personal front I have been guilty of it in recent past. Both asset allocation and diversification are two different aspects and hence they have different objectives. The primary reason individual investors get exposed to downside risk is because many are unable to differentiate between these two aspects.
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