Entries for category "Smart Investment"

When starting to invest, one of the most fundamental decisions revolves around choosing between active and passive funds. While on the surface, both appear similar pooling money from multiple investors into securities, they differ profoundly in their goals, costs, risks, and outcomes.

Choosing between active and passive funds is quite an important task for investors with a long-term outlook, as this decision can significantly impact their financial future. This in-depth …

"India's economy is growing rapidly, with a GDP increase of 6.8% in 2024, outpacing China. Its youthful workforce, expanding middle class, and digital innovations like India Stack make it an attractive destination for long-term investors. As India modernizes and strengthens its infrastructure, staying invested in its growth story could lead to significant returns"

Coronavirus or Covid-19 originated in Wuhan couple of months ago. However,  it reached viral proportions this week on Wall Street — and literally throughout the world. Cases of the illness have stabilized in China, but its spread outside the country, to nearly 80 countries in total, is what may have truly injected uneasiness into the global stock markets.

How to play the current markets under such uncertain times? What is the right thing to do keeping in mind a long term investment horizon? We believe that the answer lies in the following famous Warren Buffet quote:  "Be Fearful When Others Are Greedy, Be Greedy When Others Are Fearful" .

As per Harry Markowitz - The father of Modern Portfolio theory, diversification is the only "free lunch" in finance world. This notion that you’d get something for nothing is nearly unheard of in economics. The key concept behind the “free lunch” is correlation—or rather, a lack of it. Typically, the performance of individual asset classes isn’t perfectly correlated. If asset values do not move up and down in perfect harmony, then a diversified portfolio will have less risk. It protects the portfolio against unexpected or unpredictable events. Diversification is spreading one’s investments to protect against unexpected/ unpredictable events.

Time and again, investors have been lured by high return potential of small-cap companies. This is because smaller companies have potential to give very high returns in a very short duration of time. There are instances when a small-cap company has given more than 10x returns within one year of time. Such huge returns are unheard of in any other segment of stock markets, viz. Large and Mid size companies. 

With such a high return potential also comes the risk of losing your capital. One of the best ways to reduce this investment risk is to time your entry. Though difficult, timing is not impossible. This article gives our in-depth analysis of how to make use of the current opportunity in the small-cap space...