Investing Myths

One of the most popular questions that a business channel anchor or an analyst asks a company’s management is – “What’s your EPS estimate for the next quarter and year?”

For those who are not aware, EPS is the short form of ‘earnings per share’ and is calculated by dividing a company’s earnings/profits by its total number of shares.

During my initial days as a stock market analyst, even I was guilty of asking similar questions about earnings, though all I wanted to hear from the managements was their long-term outlook (like for 3-5 years) and not for the next quarter or year.

The truth is that the entire investment community is undeniably fixated on the EPS.
[Read more…] about Are You Playing the Stock Market’s Favourite Game?

There is an awful lot of bad advice out there when it comes to managing your money or investing in stock markets.

Like rumours, these myths get told and retold as if they were true. They spread like wildfire even though they are flat out wrong.

Some of these myths are just plain dumb, some are deceptive…but almost all are downright dangerous!

It’s time you know what these dangerous myths are, so that you are in a better position to side-step them.

So let’s get started right here, right now!

[Read more…] about 30 Most Dangerous Myths about Money & Investing

It’s only in the stock markets that trees are expected to grow to the skies.
[Read more…] about Here’s Why a Stock Market Crash Hurts So Much

If you have been made to believe that you need to be financially educated to make money from stock markets, see this…

If financial education was what was required to make money from stocks, the stock market experts would’ve become rich by investing their own money and not selling worthless stock advice to gullible small investors.

But it doesn’t happen that way.
[Read more…] about You Need Financial Education to Make Money from Stocks. Lie, Lie, Lie!

When you invest your money with a mutual fund, you don’t normally think in terms of losing money.

All you want is to make money. And this must be your fund manager’s goal as well, or so you may think.

But if you read most mutual fund advertisements and what fund managers boast about on business channels and in newspaper interviews, their ultimate goal is to ‘beat the market’.

In fact, the entire mutual fund industry seems to have conspired against the small investor by pitching him nothing but this – “Give me your money, and I’ll help you beat the market!”
[Read more…] about Who Else Wants to Beat The Market?

“You know Vishal. I have been investing in the stock markets for the past one year. And one thing I have realised is that if you are not an expert, you can’t make money from stocks.

“You have to be ‘in’ the market, and have to be very smart to become a successful investor. What’s your take on this?”

“Are you finished, Ravi?” I asked my friend who had till now given me a long sermon on how he lost a lot of money in stocks in the past 12 months, and why he thought the markets are only for people who are financially very savvy – Ravi calls them ‘smart investors’ – like analysts, fund manager, or brokers.

What Ravi was complaining about was not something new to my ears. I had heard such reasoning earlier as well, especially from people who had lost a bundle in the stock markets.
[Read more…] about “I can’t make money from stocks. I am not an expert.”

“I don’t invest in stocks. I find investing too risky!”

This is a common statement I have heard from many of my college friends who are yet to start investing. They feel they are better off without investing in stock market, and staying with the safety of bonds, and (mis-sold) insurance cum investment products like ULIPs.

It really amazes me when such educated people think that investing in stock market is risky.

This is especially when they are already taking much bigger risks by listening to their greedy advisors and wasting their money on financial products that are never going to make them any money!
[Read more…] about Investing Isn’t Risky. Not Investing Is.