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Safal Niveshak Weekly Wrap

The times are highly uncertain if you are a stock market investor. While global and Indian stock markets are showing occasional bouts of euphoria, we at Safal Niveshak believe these are going to be short-lived.

The western economies are not doing well. And the Indian economy isn’t showing positive signs as well. Inflation remains high and rising interest rates are choking the growth of businesses.

Amidst all this, there is a flurry of predictions from stock market experts – on topics ranging from depression in the west, inflation in India, movement of stock markets next week, and performance of derivatives market this coming Friday.

Sometimes (in fact, at most times), this seems phoney…unreal. People trying to predict the unpredictable, and then basking in the glory of being called as ‘experts’, is simply bogus. But this is the way it has always been, and this is the way it always will be.

Amidst this, how does a small investor safeguard his interests? How does the small investor honestly play this game that is rigged against him?

We at Safal Niveshak have some answers, as you’ll read in our constant communication with you.

Anyways, here’s a wrap up of what happened this week on Safal Niveshak.

“I can’t make money from stocks. I am not an expert.”
Among the many myths that reside within the mind of a stock market investor, the biggest is that he cannot make money from stocks just because he isn’t an expert…an expert like the talking heads on business channels, financial analysts, fund managers, and stock brokers. The reality, however, is far from this fallacy. If only you know what the experts were advising investors like you and me at the start of 2008 (when they were all bullish) and at the start of 2009 (when they were all bearish), you will know why ‘being an expert to make money’ is such a big myth. Anyways, read this post and you will know what I’m talking about, and why you’ve always been lied to that you need to be an expert to become a successful investor.

Read the full post here

Are You a Frog in Boiling Water?
The ‘frog in boiling water’ analogy is an interesting way to explain how investors ignore the fundamental changes in the investment scenario, get casual with their decisions, and ultimately lose it all. It’s better you read the post to find out what I’m saying here, and how you can safeguard yourself against getting decimated financially when the water starts boiling the next time.

Read the full post here

That Sinking Feeling Can Destroy Your Wealth
This post delves deeper into the ‘sunk cost fallacy’, which states that we are unable to ignore the sunk costs of a decision, even when those costs are unlikely to be recovered.
So if we’ve spent money on something that we later realise wasn’t worth it, we continue to hold it close to our hearts. When it comes to investing, most investors fall into this trap and lose a lot of money by just staying invested in bad stocks, or good stocks that turn bad…just because they’ve invested a lot in the stock and don’t want to turn their paper losses into real ones.

Read the full post here

What’s Your 12-month Target for the Sensex?
Before you start cranking up your brain to arrive at a number for the Sensex, let me tell you that this post isn’t about that. Instead it explains why most investors are so hell-bent on predicting the future of stock prices. What drives them to make such predictions despite historical proof that most such predictions don’t come out true? Read this post to find it out.

Read the full post here

Do You Suffer from Prediction Addiction?
This is an extension of the Thursday post (see above) and talks about how you can safeguard against becoming a prediction addict. The measures you need to adopt are simple, but they require you to be a strict disciplinarian when it comes to how you handle your stock market investing decisions.

Read the full post here

Have a nice and safe weekend!

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About the Author

Vishal Khandelwal is the founder of Safal Niveshak. He works with small investors to help them become smart and independent in their stock market investing decisions. He is a SEBI registered Research Analyst. Connect with Vishal on Twitter.

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