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People indulging in the stock market are often people with a lot of emotions. They get excited by something new, especially if it holds the promise of making them a whole lot richer and provides bragging rights at their next social gathering.

Maybe that’s why amateur and professionals alike tend to lose their minds in bull markets, particularly when a hot initial public offering, or IPO, is offered to them by their broker.

On one hand, had you bought into the IPOs of Infosys (yes, remember?), HDFC Bank, Sun Pharma, or TCS, you would have had some volatile price fluctuations along the way, but there is no question that you have made enough money to substantially change the quality of your life. Clearly, a well chosen IPO can be a life changing experience if you simply make the right choice and stick with the stock for years.

On the other hand, there is a large majority of IPOs such as those of Reliance Power, Suzlon and DLF, which have destroyed investors’ capital. With such businesses, even the “long-term” cannot save you from permanent capital destruction.

[Read more…] about Beware the IP-Ohs

After I had decided to quit my job in late 2010, we got to know that our second child was on the way.

There was a momentary dilemma whether to go ahead with the decision or not, as an added member in the family would have meant added responsibilities, and that too in a period of high financial uncertainty.

I had exhausted a large part of my savings to pay off my home loan to be able to quit that job, and now there would be an extra mouth to feed, apart from other expenses that come along with a new-born – medical bills, diapers, etc.

“Go for it!” was my wife’s call. “We will see what happens only after we take this step,” she comforted me. “Worst, if nothing works out after you quit your job, we will sell our house and move back to our hometown.”

[Read more…] about Safal Niveshak is 10 Years Old