Investing in shares, also known as equities, can provide the potential for the long-term growth of wealth and generate income in the form of dividends. Owning shares in a company gives you partial ownership of the company. It can also diversify a portfolio, which can help manage risk. Other commonly used investment options are:
Bank/Company Fixed Deposits:
IPOs are not as secure as they may seem to investors. Companies are not obligated to make as many disclosures before going public, and it is common for some policies, such as dividend payouts, to change after the IPO.
"It's almost a mathematical impossibility to imagine that, out of the thousands of things for sale on a given day, the most attractively priced is the one being sold by a knowledgeable seller (company insiders) to a less-knowledgeable buyer (investors)." - Warren Buffett.
Whenever we buy some article, we always compare the 'Price' we pay and the 'Value' we get, consciously or subconsciously.
When an investor buys a stock, he hardly compares the current price with its worth (Value). The worth of the stock is known by various names like Fair Value / Real Value / True Value, / Intrinsic Value. Without knowing the Fair Value, it is tough for an investor to have strong confidence and develop a conviction.
Mathematically, 'Fair Value' is the total of all future receivables from the company suitably discounted at current prices. Even a tiny error in predicting the lifespan of the company or its growth rate, or the discount rate used can make a significant error in arriving at Fair Value.
Often investors use a standalone PE ratio, compare the stock PE with Industry PE or look for a high dividend yield, which is not the correct way. Apart from past performance, one needs to consider the prospects, quality of management, promoter stake, etc. Thus finding worth is a combination of quantitative and qualitative tools.
We at Smart VERC use different techniques for Growth and Value stocks. PEG (Price Earnings to Growth ratio) works very well for Growth stocks and has proved a very effective valuation technique. While for Value stocks, there is no single parameter, and every stock needs to be dealt with differently. At the core of what we are looking for in this fast-changing world is, 'If I acquire a stake in your company, when will my money get doubled?'
Overall, the valuation part is not as difficult as it is made to be. It comes through experience and a better connection with the subconscious mind. To compare with, it is like driving a car which for outsiders looks very simple, but if you ask a driver to explain, he may find it very difficult even to tell you at what rpm he changes the gear from second to third!
Investing in stocks for the long term offers several advantages that can lead to wealth creation. Some of these include:
Time to ride out market fluctuations: Over the short term, stock prices can be very volatile and might not reflect the true value of a company. By investing for the long term, an investor can ride out these fluctuations and give the stock time to appreciate.
Compound Interest: When investing long-term, the investor can benefit from compound interest. Any returns made on their investment will be reinvested, leading to additional returns over time.
Diversification: Investing for the long term allows an investor to diversify their portfolio and invest in a mix of stocks from different industries and countries. This helps to spread the risk and reduce the impact of any downturns in a particular sector.
Ability to average costs: Long-term investing also allows investors to average their costs by buying more shares when prices are low and fewer when prices are high.
In conclusion, investing long-term offers several advantages that can lead to wealth creation from stocks. By investing in a diversified portfolio and giving their investments time to grow, an investor can maximize their chances of success.
The keys to success in the stock market include accurately determining the 'Fair Value' of stock, the fortitude to handle market fluctuations, patience, and effective management of a well-diversified portfolio of approximately 15 stocks.
|Book name||Publisher||Writer||Price (approx.)|
|One Up On Wall Street||Simon And Schuster||Peter Lynch, John Rothchild||Rs 400|
|Beating the street||Simon And Schuster||Peter Lynch, John Rothchild||Rs 400|
|The Little Book of Valuation: How to value a company ...||Wiley India Pvt Ltd.||Aswath Damodaran||Rs 350|
|It's When You Sell That Counts||McGraw-Hill||Donal L. Cassidy||Rs 600|
|The Winning Investment Habits Of Warren Buffett & George Soros||Truman Talley Books||Mark Tier||Rs 1800|
Many individuals have aspirations of becoming wealthy through stock market investments, but in order to achieve this goal, discipline is key. Relying on tips from brokerages or stocks recommended by free advisors can lead to quick failure. If someone promises astronomically high returns, it is important to exercise caution and be wary of unethical business practices.
"Smart Billionaire Picks" (SBP), which comes complimentary with "Smart Gains," began on May 30th, 2001, and has seen an average annual return of 25.38% (CAGR).
The success is attributed to the following:-
To learn more about SBP, Click here,
At Smart VERC, we adopt a Bottom-Up approach, which starts with analyzing a company's fundamentals, then moves on to evaluate the industry and, lastly, the economy. From time to time, we offer our insights on macro and micro economic parameters. In the long run, the company fundamentals will primarily determine a stock's price, and the market has limited influence.
It has been demonstrated globally that outperforming a well-diversified portfolio of large companies consistently year after year is nearly impossible. The BSE Sensitive Index, a broad-based index comprised of 30 highly diversified and mostly industry-leading stocks, serves as a benchmark. We are proud to announce that Smart Billionaire Picks (SBP), a component (complimentary) of our advisory product 'Smart Gains,' has outperformed the BSE Sensitive Index 76.74% of the time since its start on May 30, 2001. The SBP has generated 25.91% compound returns, compared to 14.13% from the BSE Sensitive Index over the same period.
Any stock in Smart Billionaire Picks (SBP) basket is considered a good buy at its current price. Those interested in following can replicate the complete basket by allocating their investments according to the weights assigned. Since its inception on May 30, 2001, the returns of these stocks have outperformed the BSE Sensex by a substantial margin, with compound returns almost double that of the benchmark index.
It is important to note that this collection of stocks is for demonstration purposes only and should not be taken as a recommendation to buy or sell any particular stock. It can be an educational tool for those looking to learn about diversification in terms of weightings, sectors, and groups, as well as how to make decisions about adding, holding, or exiting stocks in response to market changes. The actions are based solely on stock valuations and disregarding past price performance. The basket is always fully invested, with cash holdings typically being an insignificant amount included in the "Total." For more information on SBP, Click here,
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The advised stocks have a relatively good margin of safety in terms of the difference between their advised price and intrinsic value. However, there are still risks involved, such as sudden market fluctuations that can result in short-term losses, macroeconomic or regulatory changes, or corporate governance issues.It is important to note that there is no guarantee of success for the advised stocks in any of our services. However, we possess expertise in accurately valuing stocks and have the patience and courage to launch new schemes when others are hesitant. As evidence, our track record shows that we successfully launched the "Smart Value Gains" scheme in March 2009 with a starting sum of 1 lakh Rupees, and it reached 4 lakh Rupees in just 11 months. Additionally, the "Smart Fast Track Gains" scheme was launched in June 2009 with a starting sum of 1 lakh Rupees and doubled in just 10.3 months.
Also, our track record is a testimony to our success; Click here,
Investors may choose to purchase additional shares of a company if the following conditions are met:
Regarding the stocks recommended by us, investors can exit the position if:
For stocks not recommended by us, investors can consider selling the stock if:
Our stock selection process involves evaluating key developments that could alter a company's prospects, such as significant business agreements, budget outcomes, changes in raw material prices, technology partnerships, investments from strategic investors, CEO changes, shifts in industry trends, and other significant events. We then carefully examine the company's fundamentals, including its price-to-earnings ratio, book value, liquidity, return on equity, profit margin trend, and debt-to-equity ratio. The stock is added to our watch list if the fundamentals meet our criteria. Once the stock's price falls below its fair value by at least 20%, we consider it for inclusion in our services based on the individual's risk-return profile and investment time horizon.For more, visit Investment Philosophy
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Individual investors have the flexibility to determine their investment amount in stocks based on their financial plan, risk tolerance, and available funds.
Portfolio returns, which determine the overall stock returns, are based on the allocation of investments across various stocks. Therefore, to reduce risk, it is recommended to follow the suggested weights in the investment product.
Borrowing money for stock investment is strongly discouraged.
A long-term investment is typically considered to be over a period of 4 to 5 years, which encompasses one complete business cycle.
To reap the benefits of compounding, investments should be made over multiple cycles.
However, many investors opt for shorter investment periods and may fall victim to market downturns even if the underlying company has strong fundamentals.
For inquiries, kindly contact firstname.lastname@example.org or send a WhatsApp message at 9755920780
Publication Date: Every Wednesday by 11 AM. Buy and Sell advice notifications are sent via WhatsApp, Email, and Mobile App. Contents:
Notification of Advice:
Regular reviews of each stock can be accessed in the dashboard section on the website and the mobile app.
Research Report Publication:
Delivery of Advice:
Smart SIP Stocks:
Starting the Service:
Research reports can be accessed in the dashboard section on the website. The latest issue cannot be saved, downloaded, or printed, but all previous issues can be saved and printed.
Notifications for the subscribed product will only be received on the mobile app when you are logged in.
In all advisory products the subscribers have an access to the past advice and the period varies from product to product with a minimum period of 24 months for 'Smart Gains'.
Do not invest in a stock if it has reached the target price or stop loss, if the holding period has ended, or if it was exited for other reasons. Likewise, avoid stocks that are close to their target or stop loss. In all other cases, investment is possible.
The stock entry and exit advice is delivered through a Mobile App notification, email, and WhatsApp.
Smart Gains has two sections-
If a stock advised in "Pick of the Week" reaches its target price, investors should sell it, but if it is also included in SBP and the investor is willing to hold it for the long term, they can follow SBP's advice. A stock can be advised for sale in "Pick of the Week" but still be held in SBP due to a favorable long-term outlook, and vice versa, where the stock may be sold from SBP but still kept in "Pick of the Week."
Our advisory services provide specific weightage/allocation guidelines for each stock. As an illustration, if a stock is given a weightage of 4% and your portfolio size is Rs 10 lacs, your investment in that stock should be 4% of Rs 10 lacs, which is Rs 40,000. The weightage is determined by considering various qualitative and quantitative factors to ensure that if the stock performs well, it will lead to substantial gains for the portfolio. On the other hand, if it doesn't perform well, the impact on the overall portfolio value will be minimal.
The investment amount may vary from person to person depending on the -
As a general guideline, investing (100 - your age) percent of your total investment portfolio in equities is recommended. So, if you are 35 years old, investing around 65% in stocks through direct stocks or mutual funds is advised. New investors need to start small and gradually increase their investment as they become more familiar with market volatility.
Notifications for advice are sent through broadcast groups on WhatsApp, so they will only be received if our contact number (+919755920780) is saved in your contact list/Address-book.
There is no common stock in 'Pick of the Week' (Smart Gains) and Smart multibaggers.
Individual discussions or updates regarding the recommended stocks are not entertained. Instead, the updates can be found in the "Review" section of the website and mobile app, which is accessible by logging in. It will be communicated to all subscribers in case of a necessary buy or sell action.
Stop Loss is like Health Insurance, whose importance we genuinely understand when we fall sick.
Stop Loss is not desirable from the long-term point of view. In fact, till a couple of years ago, we were not providing Stop Loss.
We started providing Stop Loss due to the following reasons: -
We are addressing the advice needs of an average risk-return profile investor. By eliminating the ‘Stop Loss,’ there is a likelihood of high volatility and, at times, may lead to heavy Loss for conservative investors.
Smart Multibaggers: Being long-term advice, we shall further increase the depth of Stop Loss if the price approaches ‘Stop Loss’ and may change its weightage if desirable.
Examine your portfolio and ensure each stock has the assigned weightage as indicated in our advice. No sector should make up more than 15% to 20% of the portfolio. This will allow the funds freed up to be invested in future advice.
His command over managing Stocks in a portfolio is par excellent.
Your success ratio is incredible.
You have accomplished my long search for a good investment advisor.
Hats off to you, sir, for your stupendous success with 'Smart Billionaire Picks' (part of Smart Gains). I am delighted to be associated with one of India's top share market expert who is peerless.
Surprisingly simple yet powerful recommendations.
It's rare to find such honest advice. I knew there should be an easy way of making profits from stocks effectively.
By far the most competent investment advisor I have come across.
Congratulations on 22 years of Smart Gains. Following it for more than 17 years and still keep a lookout for it every Wednesday morning.
Hats off to your vision and pro-activeness.
I have been investing in Equity since 2005. But the peace of mind is at a peak after associating with you.