Lesson # 28 : Mutual Funds

Financial advisors of the world will tell you that if there's no better bet than a mutual fund if you don't have the time or the money for investing in equity{stocks}

However, the question remains is it really worth it?. All that money invested in an instrument which barely guarantees any returns yet it just may manage to consume up the entire capital in a few months.

The answer surprisingly is a YES.

Mutual Funds are one of the easiest ways to invest in a market if you are an investor.

An investor always looks at a horizon of 5 to 10 years and then chooses an appropriate fund to invest in. The point being that when you select a fund follow the following procedure :

Check the Parent Company and performance of other funds
Then check the holdings of the Fund in which you plan to put your money in
Then check the total assets under management {The larger the better}
Then check the past performance of the fund and calculate the average year on year return and not average return
Finally check as to how sound the fund manager is and what is the average amount he is paid in commission

Also check in the scheme document if there is an entry or exit load. There's a very low probability of either but why take a chance.

Follow the given steps and there is barely any chance that you will pick the wrong fund.

And finally remember to trust your financial advisor but not blindly.


-Doodle

Lesson # 27 : Monopoly

It's one of the oldest board games in the world and undoubtedly one of the finest. It's been around for ages and has been passed down from one generation to another. The game is none other than Monopoly.

Clear from the word Go monopoly offers individuals a first hand experience on dealing with property transactions to making investments in properties while calculating returns and risks simultaneously. The amount of  brain usage while making decisions in Monopoly matches the usage made while solving complex math problems or reading Literature. There's a heightened sense of response and lessons learnt while playing the game are seldom forgotten.

More often than not the game tests an individual on various levels such as determining on which properties hotels or houses should be built to which properties are worth the money to situations where individuals must choose to take loans from the bank to either repay debt or purchase properties.

The longer the game the more complex it gets and the more sound a person is in real life while making decisions.

It's a blessing in disguise knocking on your doorstep the question is are you going to make the most of it?


-Doodle

Stock Analysis # 1 : Suzlon energy

For the past few months we have been tracking a large number of stocks on the BSE as well as the NSE and have come to conclude that a majority of these stocks are trading at levels that are phenomenally below their actual values and if invested in periodically or at the earliest opportunity would give returns that could make anyone and everyone the next Oracle Of Omaha {Warren Buffet} So here's the first in a series of articles on stocks.

COMPANY : SUZLON ENERGY
PRODUCTS : RENEWABLE ENERGY [ WIND TURBINES]
CURRENT SHARE PRICE : 25.15 as on 5 April 2012 with the Sensex at 17486.02
BOOK VALUE : 38.11

Suzlon Energy stands out as being the 5th largest company in terms of Market Share in the world. Source { Wikipedia and Fortune March 2012}. It stands out as being one of the few companies investing in meaningful renewable energy and is focused on delivering wind energy to consumers.

The reason Suzlon stands out is that it trades at 25.15 currently which is nearly 25% below it's book value. This is the only reason to buy Suzlon till the time that it is at par with it's book value.

The Networth of the company stands at 6794.48 crores as compared to 5604.31 crores in the previous year. Showing a substantial growth of nearly 21%.

Moreover, Suzlon's total income stood at 4840.25 crore while it's total operating expenses were 4312.45 as compared to 3066.78 crores and 3444.85 crores respectively. Clearly indicating a growth in Volumes and a decline in the company's operating expenditure.

Should you go and buy Suzlon?


HELL YEAH



NOTE : Investments in the stock market are governed by a variety of risks and factors. Each and every individual must consult his/her financial advisor before making any suitable investment. Please note that neither the author nor the company take any guarantee or responsibility for the financial advice given.