Concentration risk while investing

Concentration risk is the risk which an investor faces while investing in only few assets and not diversifying enough. It can be concentration in a single asset class (e.g. – all equities or real estate) or single or few investments within one asset class (e.g. – buying just 2 stocks for entire portfolio!). If everything goes well, this concentration can be very good for you. But it requires things going wonderfully well for that asset class and your specific investments. But, as you think of placing concentrated bets … are you aware of the risk? What if the asset class/ investment you have been bullish upon, doesn’t do well? Here are some ways the concentration risk while investing can play out.

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Common mis-selling in financial products

Mis-selling in financial products – There is nothing new or uncommon in this. Yet we often fail to realize this – or realize it after it is too late! It is not uncommon to hear stories where people bought product because a friendly uncle or friend or bank’s relationship manager (RM) or investment adviser suggested. […]

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Where are the stock markets headed for?

Where are the stock markets headed for? We all can make calculated guesses based upon our own understanding and observations. Some of us will probably be right. But nobody knows for sure where the stock markets are headed for.

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Some common misconceptions about investing

A right approach towards investments can be your starting point towards your financial goals. While your investment mix may not always be perfect (who has!?) it is good to understand different investments, how they work and how they can help you achieve you financial goals. Before that, it is important to dispel some common misconceptions about investing, and hopefully base investing decision based upon understanding  of how that investment works rather than hearsay!

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The risk in not investing in equities

While equities (including mutual funds) have historically given good returns in a long time horizon. they come with a risk. However, while there is a risk associated with investing in equities, there is a risk associated with not investing in equities also.What are the risks of not investing in equities?

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Capital protection or capital growth?

What is your purpose of investing – Most of the answers to this question can lead to one of the following – capital protection and capital growth. Which goal should you be chasing?

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3 questions to ask before doing asset allocation

Different people can have different asset allocation strategies. And all these can be right at the same time. You need to choose the asset allocation strategy that best suits your needs. What are the different asset classes you can invest in? And what is the ideal asset allocation strategy?

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Why do people lose money in stock market?

Ownership of good quality stocks has often been associated with wealth creation and financial independence. There have been several people who have made a good amount of wealth via stock markets – by investing, staying invested or trading. At the same time, there are many more who have  failed to emulate them, or lost money […]

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