5th October 2015 | VOL 9 | ISSUE 18Fortnightly Issue        
Special Story

Investorpreneur - Oh! I will never understand these stock markets

This is a theatrical series that comprises interactive edutainment sessions on the most pertinent topic in the contemporary world – ‘Investment’. ‘Investorpreneur’ is a term coined to represent a lucrative combination of an investor and an entrepreneur. Every entrepreneur attempts to maximise business prospects and profitability to the fullest.

Expert's View

Your friend in need could be gold indeed

Gold can be one of the most crucial and lucrative investments that you can make, which will give you assured benefits over a life time. Gold has been the most coveted precious yellow metal in world for centuries together. In fact, India might be the only country in this world where people consider buying gold as auspicious.

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Financial Planning

A Beginner's Guide to Investing in Shares

Deena Mehta
Mrs. Deena Mehta
Managing Director, ACMIIL

Share markets are either the most favored or the most hated entity, depending on their status.

Equity SIP Model Portfolio
Conceptually, an Investment Advisory is a service that provides investment advice and designs a strategy to manage a certain sum of funds.
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Disclaimer: This InvestorFirst Magazine of Asit C. Mehta Investment Interrmediates Limited is meant to educate its recipients only. The news and views herein do not constitute investment advice or an offer to sell, or a solicitation of an offer to purchase or subscribe for any investment. The information herein is derived from sources believed to be reliable and is subject to change without notice.

Investorpreneur - Oh! I will never understand these stock markets




This is a theatrical series that comprises interactive edutainment sessions on the most pertinent topic in the contemporary world – ‘Investment’. ‘Investorpreneur’ is a term coined to represent a lucrative combination of an investor and an entrepreneur. Every entrepreneur attempts to maximise business prospects and profitability to the fullest. Likewise, every investor looks to compound his/her investments over a given period of time. However, a successful ‘investorpreneur’ combines the winning qualities of an entrepreneur and an investor in his/her quest for maximising returns in the most optimum manner.

The series is divided into chapters and episodes. Each chapter would portray a theme, which will form the base for the episodes covering that chapter. These episodes would comprise interactive sessions between the main protagonist – the succesful investorpreneur and other characters, which would feed of the knowledge of the main protagonist. Written in simple and conversational English with a sprinkle of Hindi wherever necessary, the Investorpreneur series aims to ‘edutain’ you – a highly demanding investor, on the increasing importance of financial planning and investment. The sessions will help you understand various vital concepts pertaining to investment.

HAPPY INVESTING!

Episode3: Oh! I will never understand these stock markets

Rahul’s belief in diversifying his investment portfolio and investing in equity markets just got better by the day. He’s always curious to know about the numerous investment options at his disposal that he could use to multiply his savings effectively. However, information hurled at him from all corners about stock markets, investment, savings, and other related concepts has created serious confusion in his mind, which he needs to clear. It is a Monday evening. Rahul’s just back from office, relaxing on the sofa watching news as Simran serves him coffee.

Rahul: Can anyone understand this stock market properly Simi?

Simran: Why? What happened?

Rahul: Last week the market was doing well and was trending upwards, this week it is back to its old fluctuating ways. I mean, your coffee doesn’t change its taste as much as the market changes directions.

Simran: Ya! Try and make coffee for yourself and then talk my dear husband. By the way, your CA friend Amit called today afternoon regarding your IT returns, give him a buzz.

Rahul : Woah! I completely forgot about the ITRs. Thanks Simi and by the way, this cup of coffee rocks. Thanks wifey! (Rahul calls his CA friend Amit who handles his tax filings and Amit answers his call)

Amit : Hey Rahul! What’s up mate? Long time, no see, no hear.

Rahul : Sorry mate, I was busy with a new project and was completely engrossed in work. So, what’s the latest on my ITR? Please let me know what you need.

Amit : Nothing much yaar, I’m done with your computation of total income. I just wanted the transaction receipts of the trades you executed this year on the stock market just to work out the capital gains. Simi Bhabhi was telling me you are all geared up these days about investment. I’m done with the rest. (Rahul says sarcastically)

Rahul : Ya! Ya! I will send you the transaction receipts of all my executed trades.

Amit : That’s fine mate, but why is someone sounding so sarcastic all of a sudden? Kya baat hai yaar? You can share with me, maybe I can help.

Rahul : Nothing mate, I’m totally confused with this stock market. One week it is up, the other week it is down. Certain company’s stocks do well one day and they fail to perform well another day. Moreover, these companies offer shares through IPOs, FPOs, and OFS. How would a lay person like me know whether to subscribe or not? Plus, I hear all these new terms limit order, stop loss, and what not. I know stock markets are great to invest in but isn’t it important for an investor to know about the market he’s investing in? The terminology used? And much more, to help the investor maximise his/her savings

Amit : Hello Mr. Frenzy. Take it easy pal. It is just a stock market and it is much easier than understanding Chinese my friend. All you have to do is to become a decent student who is willing to learn about the market.That’s it.

Rahul : Oh Ya! Then please convince me.

Amit : Look my friend! There are highly informative websites that publish lots of relevant investor education content, which is highly effective in training you to become a potent investor. The BSE and NSE websites also have loads of valuable information about stock market trading and other related concepts. The information is out there, it is up to you to assimilate it. Moreover, your stock broker or financial planner can be your best friend here indeed. Simply call them, bug them, bore them with your questions, bombard them with all your doubts, and believe me you! They have all the patience in the world to hear your queries and provide you with lucrative solutions.

Rahul ; Hmmm! The story’s getting interesting by the minute my friend. Carry on mate, I’m all ears.

Amit ; Let’s take the examples that you mentioned such as IPOs, FPOs, OFS, and limit order. If you want to know whether to subscribe shares through an IPO, simply get in touch with your broker and ask him to guide you. They will tell you whether or not to invest. Likewise, they will explain limit orders, stop loss, and all such queries in your mind. Broking houses generally provide you with research reports on stocks, stock recommendations, market analysis reports, and other valuable advisory services. It is up to you to use it wisely. Mate, just remember a simple thing – no question is stupid,definitely not when it pertains to investing your hard earned money into various avenues. Therefore, stop getting finicky about the stock market and just equip yourself with the right knowledge from the right people and sources. This will enable you to become a good and well-informed investor.

Rahul : That’s highly informative Amit. Thanks mate! You’ve eased my nerves to a large extent. Why should I trouble my mind so much when there are experts sitting out there with an ocean of information? I should instead squeeze a few drops of their precious knowledge and use it wisely. I will get in touch with my stock broker soon to know more about the stock market. Well! If the markets rise, they rise for a reason and likewise, if they drop, even that’s for a good reason. So, wouldn’t it be better to be as close as possible to knowing those reasons in order to become good investors?

Amit : Well said. Woah! Rahul, yaar, I’m getting another call from a client. I will get back to you a little later. Please send over your stock market transaction details. Seyya mate!

Rahul : Thanks for your help, take care, and good night.

Rahul understood very clearly that knowledge is the only way to make your investment strategies work in the stock market.Have you? Please note that knowledge helps you take well-informed investment decisions. The source and people that provide you with this knowledge become pivotal. Rahul has become a potent ‘investorpreneur’ in the true sense of the term.It is time for you to start acting on your investments.

We will soon be coming up with the first episode of a brand new chapter 4 in the Investorpreneur Series. Happy Investing!

Disclaimer: 
All characters in this series are fictitious and bear no resemblance to real life, facts, or scenarios. Any similarity in real life with the characters of this series should be treated as a mere coincidence. Through this series, we intend to educate people about the growing significance of investment and financial planning through entertaining interactive sessions. We do not intend to hurt the sentiment of any particular person or religion either directly or indirectly. Moreover, we do not intend to discriminate between people based on their investment and financial strengths. We provide a wide range of advisory services pertaining to financial planning and investment. Therefore, the opinions and ideas cited in the series emanate from our prudent individual judgements, which we have developed through decades of market experience of serving thousands of successful ‘Investorpreneurs’. Thus, we are not responsible for any actions taken by the readers of this series based on the matter discussed in each of the episodes without consulting us officially. We request all the readers of this series to use their own discretion while assimilating the information provided in the series or contact us for further help.

Your friend in need could be gold indeed



Gold can be one of the most crucial and lucrative investments that you can make, which will give you assured benefits over a life time. Gold has been the most coveted precious yellow metal in world for centuries together. In fact, India might be the only country in this world where people consider buying gold as auspicious. Therefore, in this article, let’s look at some of the major characteristics that have ensured that the precious yellow metal’s significance never diminishes.

Irrespective of your age, gold can be that best friend you are always searching for in times of need. For those who are in or around their 30s, you are most likely working for a good company, planning your future, family’s future, your retirement, and servicing a car loan/home loan/credit card. Given this scenario, gold can be a decent investment for you in terms of having a cover for rising prices. Yes, gold can act as a decent hedge against inflation mainly because gold prices generally tend to rise at around a higher price than other costs.

Moreover, people in and around their 30s tend to often explore new career opportunities, which take them around the world. Gold investment can turn out extremely handy in those circumstances largely because of the universal value that the yellow metal possesses. So, don’t you think gold can be your best friend indeed?

All working women in and around their 30s can use gold as a profitable investment avenue. The gold that you invest in today will come in extremely handy for you during your marriage and later on, during your children’s marriage.

The most important thing that all of you in your 30s must remember is that this is the time to cash in, since your earnings ability would have touched a peak. Thus, it becomes pertinent and all the more important for you to invest in gold. Please note that the precious yellow metal has centuries of history backing its value and success as a safe investment avenue.

Let’s now look at gold as an investment avenue for those in their 50s and 60s. In these age categories, you would be completely engrossed in planning your retirement and your children’s marriage. In fact, you will try to search for ways to increase your overall disposable income. Gold can be a very effective option here for you, which will go a long way in helping you achieve your overall financial objectives. The yellow metal apart from being highly helpful to you, especially during your children’s wedding will act as the all-important buffer that you will need during rainy days, especially after retirement. Moreover, it is one of the easiest things in terms of distribution related to inheritance. You could keep a portion of gold after your retirement for yourself to cover for rough phases ahead and distribute the rest to your family. Today, you can diversify your gold portfolio by exploring various direct and indirect investment options such as gold ETFs, E-gold, gold SIPs, and gold stocks. You need not just hold gold in physical form anymore. Please consult an investment expert now and see how you could explore these various investment options effectively.

Therefore, irrespective of your age, ensure that you apportion at least 10% of your overall portfolio to gold. Invest in gold today and gold will become your friend in need tomorrow when you might go through lean phases or rainy days.


A Beginner's Guide to Investing in Shares

Deena Mehta
 
Mrs. Deena Mehta
Managing Director, ACMIIL
 


Share markets are either the most favored or the most hated entity, depending on their status. A rising market is characterized by the build up of a herd mentality. If the index goes up continuously for 15 days, there is a sudden spurt in interest in buying. If the market falls drastically, calls from brokers are avoided. When the markets are range bound there is interest but it is limited to general update on markets and not on transactions.

Investors tend to follow herd mentality.

They buy when markets are substantially high expecting it to increase further and sell in desperation when markets drop expecting it to drop further. They avoid investments in companies when they are available at a good price out of fear of prices dropping further.

Logically one should book profits in an over heated market while pick up bargains when the prices have crashed.

Many believe that stock market is a place for speculation.

Thus, due to misconceptions about investments in shares, most of the people keep away from the market.

But can they afford to stay away? NO - and the reasons are not far to seek.

In India, in the absence of worthwhile social security schemes and reliable medical insurance cover, so commonplace in the developed countries, we have to build a nest egg for old age.

Savings have to cover daily expenses, long-term family obligations, such as the education of children or marriage, and medical emergencies. It is no wonder then that India's saving rate is as high as 25-27% of the GDP, one of the highest in the world.

The catch is that the interest earned on savings has to be higher than the rate of inflation. If not, real wealth gets devalued over time. The interest rate curve has been falling rapidly. Over the past few years, the rates of interest earned from banks and various government schemes have dropped substantially.

It is in such a scenario that stock markets come to the rescue. Stocks have consistently provided higher returns than fixed income savings avenues. They provide the power to beat inflation. However, we hear stories all the time about people losing in the stock markets. Where are the gains? Perhaps, one has to question our attitude towards share investments. Do we perceive shares as investments? Or a form of lottery with a jackpot rounds the corner?

Any investment proposal needs to be evaluated against the returns it will provide over a specific time frame. However, when shares are bought, investors do not target specific levels of returns nor do they consider the risks. The share market is not the place to look for a windfall. However, over the long - term, share markets have normally provided returns averaging around 15% to 20%. Anything more than this should be considered abnormal. There are times when share prices climb even higher - but the ones who really benefit are those who cash in on their gains. Don't belittle the 15% - 20% annual gain that shares have been giving. Over time - and with compounding - it makes a huge difference. Money can be made on the share markets only if targets are set - and a stop loss limit. For example: if an investor wishes to earn a return of 30% annually, the portfolio may be rotated thrice a year, with a 10% target profit each time the investor enters and exits the market. In the same way, if there is a 10% loss, one must exit the share. With such targets, it is difficult to make sizeable losses. One could try his theory out on a mock portfolio.

Even if the profits are not targeted, the stop loss must be set, even if he purchases are for delivery.

The availability of a Demat facility makes entry and exit extremely easy.

Investors who have speculative tendencies should dabble in the options market, rather then be day traders in the cash market. Options bought help you to limit your losses since the maximum amount one can lose is the premium on options, and not the entire capital. Option writing (or selling) is to be done by markets savvy participants and not by general investors.

The portfolio has to be structured on the basis of how frequently you require the income flows and the capital return. The composition of the portfolio also depends on your age, status in life, other sources of income, risk bearing capacity, etc. It's wise not to put all your eggs in the share market alone, as it can, at times, be the most risky investment. Persons with fewer social obligations can afford to put more money in the share market, whereas a senior citizen could allocate just 5% of his wealth to shares. Every one needs to spend time to build a portfolio that suits their individual needs. Lastly, a word of caution about the advice given by brokers.

Every one actively seeks advice from brokers. However, unless the broker is a registered portfolio advisor, he will not be tracking your portfolio. He will merely give you a view on the market, certain segments of businesses and on the stocks that are the current favorites. The broker's view is essentially a short-term view and not comprehensive portfolio approach. He is too close to the market and is affected by short-term price movements and changes in sentiment. In the absence of a full-fledged research department, the broker is unable to do in-depth study and provide a long-term view about different stocks.

In such a situation, it would be advisable to track your own stocks. Do not expect your broker to give you the signals. It is your money that is at stake. You must manage it by setting - and sticking to -the buy and sell targets. Even if a share has been bought on a broker's advice, it is necessary to dispose it when you have achieved your targeted return. Set small goals, because they are not difficult to achieve.

Please remember the advice about profit and stop loss. Most of the money lost in shares markets is due to greed. Similarly, investors are afraid to book a loss. We all have impossible aspirations of earning big money, quick money and effortless money. We do not sell because we want to wait for the highest price. But few are able to sell at the top - getting the timing exactly right is almost impossible! Similarly investors are afraid to book a loss that has already occurred. So they let things drag out - and then they sell at a much bigger loss. Sometimes, they wait so long that the shares become worthless. Remember that no complex or sophisticated study is needed to operate prudently and successfully in the stock market. Investors must keep their emotions in check. What's really needed is a lot of common sense.



Equity SIP Model Portfolio

Conceptually, an Investment Advisory is a service that provides investment advice and designs a strategy to manage a certain sum of funds. Here, we have provided an investment strategy in the form of Equity SIP model portfolios. With the basic understanding that investors can be broadly classified as high, medium and low risk takers, we designed Aggressive, Moderate and Defensive Portfolios respectively, as on January 2013. Each portfolio basket requires an investment of aproximately Rs.10,000 per month and is a good way of accumulating fundamentally sound stocks for a long term horizon. These portfolios will be reviewed half yearly and any changes will be communicated accordingly.

Aggressive Portfolio
Sr. No. Scrip Name Sector Weight Basket Qty Price as on 30th Sept 2015 Total Value Portfolio Beta Return
% Return Wt. Return
1 Tata Motors Ltd Automobile 14.68% 1.00 298.60 298.60 0.21 -0.22 -3.24%
2 ICICI Bank Banking 18.54% 2.00 270.35 540.70 0.28 0.02 0.45%
3 LIC Housing Finance Ltd NBFC 7.12% 1.00 470.55 470.55 0.11 0.63 4.49%
ADD VEDL Diversified 1.69% 2.00 84.70 169.40 0.02 -0.49 -0.82%
5 Ambuja Cement Ltd Cement 5.14% 2.00 205.80 411.60 0.06 0.04 0.21%
6 ONGC Ltd Oil & Gas 5.29% 2.00 229.35 458.70 0.07 -0.39 -2.05%
7 Aditya Birla Nuvo Ltd Diversified 21.42% 1.00 2,144.05 2144.05 0.29 0.49 10.51%
8 Adani Ports Port & Logistics 1.50% 2.00 299.00 598.00 0.03 0.02 0.02%
9 BHEL Capital Goods 1.14% 2.00 205.55 411.10 0.02 -0.08 -0.09%
10 Tata Steel Ltd Metals & Mining 6.75% 2.00 212.60 425.20 0.09 -0.40 -2.68%
11 Sun Pharmaceuticals Inds. Ltd Pharmaceuticals 14.21% 1.00 868.40 868.40 0.13 0.35 5.01%
12 AXIS Bank Banking 2.52% 2.00 495.65 991.30 0.04 0.00 0.01%
EXIT Return from Exited stocks 15.92%
Total 100.00% 7787.60 1.33 27.74%
 
Moderate Portfolio
Sr. No. Scrip Name Sector Weight Basket Qty Price as on 30th Sept 2015 Total Value Portfolio Beta Return
% Return Wt. Return
1 HDFC Bank Banking 12.22% 1.00 1,068.80 1068.80 0.11 0.29 3.58%
2 M&M Financial Services Ltd NBFC 4.79% 2.00 239.35 478.70 0.04 -0.10 -0.49%
3 VEDL Diversified 0.86% 2.00 84.70 169.40 0.01 -0.49 -0.42%
4 Ambuja Cement Ltd Cement 4.46% 2.00 205.80 411.60 0.06 0.02 0.08%
5 ITC Ltd FMCG 8.40% 2.00 328.80 657.60 0.04 -0.02 -0.18%
6 TCS Ltd IT services 28.54% 1.00 2,588.05 2588.05 0.16 0.14 3.99%
7 Zee Entertainment Ent. Ltd Media 6.35% 2.00 392.45 784.90 0.05 0.37 2.33%
8 Hindalco Inds. Ltd Metals & Mining 3.22% 3.00 70.80 212.40 0.05 -0.43 -1.39%
9 Reliance Inds. Ltd Oil & Gas 11.59% 1.00 862.30 862.30 0.13 -0.07 -0.76%
10 Biocon Ltd Pharmaceuticals 8.81% 2.00 444.60 889.20 0.08 0.12 1.03%
11 Bharti Airtel Ltd Telecom 10.75% 2.00 337.85 675.70 0.06 -0.02 -0.19%
EXIT Return from Exited stocks 13.19%
Total 100.00% 8798.65 0.79 20.76%
 
Defensive Portfolio
Sr. No. Scrip Name Sector Weight Basket Qty Price as on 30th Sept 2015 Total Value Portfolio Beta Return
% Return Wt. Return
1 Glenmark Pharma Pharmaceuticals 2.62% 1.00 1,049.20 1049.20 0.01 -0.16 -0.41%
2 HDFC Bank Banking 13.56% 1.00 1,068.80 1068.80 0.11 0.26 3.53%
3 Cummins India Ltd Capital Goods 9.83% 1.00 1,095.40 1095.40 0.07 0.50 4.91%
4 Dabur India Ltd FMCG 9.58% 2.00 276.00 552.00 0.05 0.36 3.43%
5 Tech Mahindra IT services 1.33% 1.00 557.35 557.35 0.01 -0.12 -0.16%
6 TCS Ltd IT services 32.48% 1.00 2,588.05 2588.05 0.18 0.07 2.43%
7 Hind. Unilever FMCG 2.21% 1.00 814.75 814.75 0.01 -0.22 -0.49%
8 Oil India Oil & Gas 1.13% 1.00 423.35 423.35 0.01 -0.21 -0.24%
9 Lupin Ltd Pharmaceuticals 17.77% 1.00 2,034.00 2034.00 0.11 0.54 9.65%
10 Bharti Airtel Ltd Telecom 9.49% 1.00 337.85 337.85 0.05 -0.08 -0.73%
EXIT Return from Exited stocks 34.90%
Total 100.00% 10520.75 0.60 56.83%

Mid Cap Portfolio
Sr. No. Scrip Name Sector Weight Basket Qty Price as on 30th Sept 2015 Total Value Portfolio Beta Return
% Return Wt. Return
1 Motherson Sumi Systems Ltd Auto Ancillaries 9.13% 2.00 230.35 460.70 0.08 0.01 0.09%
3 Kalpataru Power Power Transmission 2.66% 3.00 254.15 762.45 0.04 0.30 0.80%
4 Va Tech Wabag Ltd Capital Goods 28.90% 1.00 665.00 665.00 0.31 0.09 2.74%
5 PFS NBFC 1.42% 10.00 45.20 452.00 0.02 0.44 0.63%
6 Gateway Distriparks Logistic 7.49% 2.00 357.05 714.10 0.07 -0.21 -1.56%
7 Aia Engineering Ltd Capital Goods 15.73% 1.00 991.70 991.70 0.12 0.00 0.00%
8 Apollo Tyre Auto Ancillaries 1.96% 3.00 179.95 539.85 0.03 0.25 0.49%
9 Ipca Laboratories Ltd Pharmaceuticals 14.55% 1.00 741.80 741.80 0.07 -0.04 -0.54%
10 JK Cement Ltd Cement 11.52% 1.00 653.35 653.35 0.15 0.29 3.29%
11 DHFL NBFC 3.43% 4.00 219.95 879.80 0.04 0.16 0.56%
12 Majesco Ltd* IT 3.21% 2.00 309.65 619.30 0.03 0.02 0.06%
Exit Return from Exited stocks 39.18%
Total 100.00% 7480.05 0.96 45.73%

 

 

About Us

Company History & Background
Established in the year 1986, Asit C. Mehta Investment Interrmediates Ltd. (ACMIIL) is one of the most trusted and reputed brokerage houses known for providing investment related services in the capital market, money market and depository services in India. The company has been jointly promoted by noted stock market professionals, Mr. Asit C. Mehta and Mrs. Deena A. Mehta and is a part of Mumbai-based Nucleus Group of Companies. The other group companies are engaged in commodity, derivatives, development of databases, back-office applications for banks, corporate document management solutions and Geographical Information Systems (GIS).
Corporate Purpose
Envisioned to be a "Trusted Financial Intermediary", the group has etched out a very specific corporate purpose - "To reach appropriate financial products, services and solutions to every Indian entity."
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Asit C Mehta Investment Interrmediates Ltd.
Nucleus House, Saki-Vihar Road,
Andheri (E), Mumbai 400 072.
Maharashtra. India.
Telephone : 91-22-28583333,66798315,28577898
Fax : 91-22-28577647
Email : helpdesk@acm.co.in
For corporate level general communication, you need to email at acmiil@acm.co.in
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