Can an individual investor match upto market experts? Yes, he can. The popular opinion is that an investor has no chance in today's volatile markets. The methodology used by professionals, investment strategies and links to worldwide happenings imply that there is no scope for the individual investor in today's institutionalized markets. Nothing could be further away from the truth. E-broking is one solution to the lay investor as these websites provide online information from wire agencies such as Reuters, expert investment advice, research database which is available with the institutions. The advent of online broking has bridged the gap between institutions and the retail investor. A fund manager is faced with many disadvantages. Typically, a fund manager will not buy high-growth stocks, which are available in small volumes. In some cases an attractive position cannot be capitalized by a fund as the situation might be ultra vires to the fund’s objectives. Sometimes, the fund manager’s risk exposure is high in particular scrips and volumes held, high too. Hence his liquidity is curbed while smaller volumes give the individual investor a higher level of liquidity. A researched view can tilt the scales in favor of the small investor. |
| Singing the market’s tune. Not always. Be a contrarian! When markets start rising, more people step aboard. And when the indices start falling there is panic selling. Most of the times new investors are late in identifying a rally and are late entrants, leaving them with high-priced stocks. Contrarians buy on bad news, and sell on good news. “Buy low, sell high” is a well-known cliché. That’s how an investor must think in order to profit from stock investing. All stock-market investors embrace the motto "Buy low, sell high." But few act accordingly. The herd mentality restricts us from pursuing a contrarian investment strategy, though it consistently beats the market. There are proven techniques for selecting undervalued stocks which are rarely followed. The contrarian strategy advises you to pay a cursory look at a company's business fundamentals, stocks trading at below-market multiples of EPS, cash flow, book value, or dividend yield before taking an investment decision. Historically, stocks that are cheap by any of the above measures tend to outperform the market. To do contrary, you would require to go against the crowd, buying stocks that are out of favor and sell a few of Dalal Street’s darlings. This requires overriding powerful instincts.
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| Power of the World Wide Web (www) Internet has changed the way the retail investor invests. Stock prices, volume information, investment tools, technical analysis is at his fingertips. Many sites offer Spot Reviews of news breaks and result analysis, which help investors to from an opinion on a particular stock. As the world is networked with the Web you can consult with experts from across cities states. As the internet is flooded with information, an overload, its imperative that you learn to figure out which information is useful and which is not. |
| Forming Investment Clubs: If you as an individual investor do not have enough money to invest, or know not enough about investing and do not have the time to learn too. Well, a perfect solution then will be to join or form an investment club. Investment clubs are formed by people who pool in their money to invest in stocks, bonds, mutual funds and other investments. The appeal is simple: A club has the funds to diversify its investments better than an individual and the knowledge base is wider. Investment clubs can be formed between family, friends and people who work together. However, forming a club with co-workers is a lot easier. But bear in mind that the biggest complaint among club members is finding a convenient time and place to meet each month. Forget not, you can talk about club news over the water cooler or canteen too. To form a club First step, send out a memo or email asking select members to come to an introductory meeting. During that first meeting, discuss monthly dues. How much can people afford? Secondly, give members a profile personality test to see where everyone stands. Are they risk takers or conservative investors? Club members should be compatible when it comes to investment goals. Make sure you recruit people who are truly committed, which means meeting once a month and sharing the workload when it comes to researching companies, picking stocks and reviewing the club's portfolio. It's common for members to get impatient and to jump ship shortly after the club's formation. Alternatively, member participation tends to drag due to a personal or financial crisis arises. The first few years are the crucial building blocks of a club. Members who survive the two-year hump tend to hang on for the long haul -- 20 years or more. Still, every club must prepare in its bylaws how to bring in new recruits and handle departing members who want to cash out. Finally, once you have hammered out the goals and operation of the proposed club, if a sufficient number -- around 10 -- are still interested, then you are ready to forge ahead. |
| How else can indiequi help? Indiequi from its end offers virtually everything within the ambit of research tools. Investors has option of using technical analysis, fundamental research, database of many companies, key ratios, analysts recommendations of future earnings, interviews, company presentations, features, news from the country's leading business daily Business Standard and worldwide wire agency Reuters, which assist our investors to make their investment decisions. For Stock advice : Saturday watch on Market Outlook |
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