Best products from r/IndiaInvestments

I think @partickbobstarpants has given a good list. And normally writing such a post will require at least 100 pages, here's something which I keep thinking about:

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First, Learn meditation and staying calm. Losses are part and parcel of investing. People get high on wins and panic a hell lot when they take a hit. Sometimes withdrawing money too early. You need to be ready to take it on the chin. Sometimes you might come out looking like a fool. Just remember it happens with even the best of investors.

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Second, there are multiple ways to win:

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When you pick a Technical Analysis book, it show you some beautiful lines of Moving Averages predicting a stock going up and down, it will look down upon other techniques. What it doesn't tell you that Moving averages sometimes lag and whipsaw a lot.

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When you pick up a Price Action book, it will show you beautiful charts of prices bouncing off Support and Resistance. It will again look down upon other techniques. What it doesn't tell you that in a fast moving market, no gives a shit about Pivots, Support or Resistance.

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When you pick up a fundamental technique book, for example Value investing, it will show you beautiful examples of people buying companies at intrinsic value and then selling it off for double/triple gains. What it wont tell you is that finding correct intrinsic value is difficult even for Buffet.

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It is not that each of these techniques don't work. The problem lies with people taking everything on faith and emulating what someone has said. People who are stuck in the copy mode, never win because all they know is to copy. Best investors are those who find their own way. The best example is the godfather of investing Warren Buffet - he started with Graham style deep value cheap stocks before shifting away to Munger/Lynch's good company at cheap price. He evolved and developed his own technique.

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If you need a book to star off with, see if you can get a cheap copy of this: https://www.amazon.in/Good-Stocks-Cheap-Confidence-Outperformance/dp/125983607X (while you can pirate it, I'd suggest buying so that the author can be rewarded for his work). The beauty of the book is that it is very basic as well as deep, things you will understand with experience. The point ,again, shouldn't be to copy his style word for word rather evolve your own.

> When times are good I earn upto 3Lacs a month. But the income is not very stable.

All planning must start with this first. Everything else is mostly irrelevant, including your choices to diversify earnings.

Your portfolio allocation should be such that your allocation to bonds should be higher than someone of equivalent age but in a job with a stable income stream.

Read this trade magazine article. Emphasizing one paragraph (page 2, portfolio diversification) from it:

> You should make sure your clients’ total (i.e., human and financial,
capital) portfolio is properly diversified. In simple words, when one type of capital zigs, the other should zag. In the early stages of the life cycle, financial capital and investment should be used to hedge and diversify human capital. Think of clients’ investable assets as a defence against adverse salaries and wages as opposed to an isolated pot of money that has
to be allocated.

> For example, if you took a look at my financial portfolio, you would see that my RRSP and discretionary savings are quite heavily invested in individual equities and mutual funds. And for good reason. As a tenured university professor, my human capital—and the subsequent pension I am entitled to—has the identical properties of a fixed income bond fund with monthly coupons. I am truly a walking inflation-adjusted real return bond. Therefore, I have very little need for fixed income bonds, money market funds and GICs in my financial portfolio. As a result, my total portfolio of human and financial capital is well-balanced, despite the fact that individually my financial capital and human capital are not.

> In contrast, my MBA students might earn a lot more than their university professor during their lifetime, but from year to-year
their relative income and bonus will fluctuate depending on the performance of the stock market, the industry they work in and the unpredictable vagaries of their labour market. Their human capital is almost entirely invested in equity, and so their financial capital should consist primarily of bonds and GICs early in their working career.

You are not a tenured univ professor, and quite different from one. The portfolio allocation should be on the other side. You are walking equity with lumpsum gains, with the added risk of crash landing (not being judgemental here, just highlighting the risks of your job).

And 5 years, is not a long run, and I see no goal at the end of 5 years that you seek to achieve. So start with planning your retirement corpus.

Pick a copy of this book if you are inclined to a DIY retirement plan. Or engage with a fee-only independent financial advisor.

(2) A good starting point for an investor is -

- [Stocks for the long run](https://en.wikipedia.org/wiki/Stocks_for_the_Long_Run) Big takeaway - dont be scared of volatility. Stay the course and you will rewarded.

- [Random walk down wall street](https://www.amazon.com/Random-Walk-Down-Wall-Street/dp/0393330338) Big takeaway - true alpha is hard and other investors are equally smart so beating an index is not trivial.

- [Thinking Fast and Slow](https://en.wikipedia.org/wiki/Thinking,_Fast_and_Slow) Big takeaway - our biases are predictable and we can correct for them if we know them.

- [Devil Take the Hindmost](https://www.amazon.com/Devil-Take-Hindmost-Financial-Speculation/dp/0452281806) Big takeaway - risk is real.

Have purposefully kept it small and diverse. More than often people list 20 book and the task seems so overwhelming that a vast majority chooses to not even start.

The Signal and the Noise, by Nate Silver. (Goodreads, Amazon)

Speaks about the way we make predictions in various fields, such as the economy, politics, weather, stock market, sports (which teams win championships, which players will become successful) and others.

He's the chief editor of the news website fivethirtyeight. Although its America-centric, the quality of the reporting there is peerless because its entirely backed up by data, rather than opinion.

If you want to know more about /u/vineetr said then you should read this book. It is pretty good.

The book which had the biggest influence on me and changed my view on Investing was from John Bogle, Father of index funds.

This is the one and only one book on index investing you require ;-).
Little book of common sense investing.
Its the number one best seller in mutual fund investing over amazon.

He has written many other books too which you can slowly digest one by one.

I think most TA is bs, but it is worth checking out Evidence-based Technical Analysis by David Aronson if you are interested in the domain.

Thanks.

This book seems to have lots of information on why this portfolio is beneficial. Am still reading it.

http://www.amazon.com/The-Permanent-Portfolio-Long-Term-Investment/dp/1118288254

It mentions exactly what you have stated. It also compares it with the 60/40 portfolio.

Why would countries buy more gold then? Each country is regularly increasing their gold vaults. When currencies fail, gold will decide your worth. Gold is much more than hedging against inflation, especially in a country like India.

Read this book. It's really good.

https://www.amazon.com/New-Case-Gold-James-Rickards/dp/1101980761/ref=mp_s_a_1_2?keywords=gold+book&qid=1570213655&sr=8-2

I am reading I Will Teach You to Be Rich by Ramit Sethi

The Science of Stock Market Investment - Practical Guide to Intelligent Investors https://www.amazon.in/dp/B009XUI1X6/ref=cm_sw_r_cp_apa_i_39lNBb4HNA8EC

Yes you need to learn technical analysis, if you did not know that what exactly were you doing in the last 6 months?


http://www.amazon.in/Technical-Analysis-Financial-Markets-Comprehensive/dp/0735200661

I am just learning the very basics of stock trading. I started with Why Stocks Go Up and Down, and if I am done with it, I'll try Little Book of Value Investing. Maybe by then I will be able to comprehend The Intelligent Investor. The last one is considered a classic, but also too dense for novices.

I think in this kind of falling markets, some people use value averaging.

Does someone use this technique here? I have not read the book but here is a recommended book.
https://www.amazon.com/Value-Averaging-Strategy-Investment-Returns/dp/0470049774

Not about actual trading strategies. But in general about alternative investments.

https://www.amazon.com/Handbook-Alternative-Investments-Darrell-Jobman/dp/0471418609

> the smartest people in the world and their collective knowledge is what makes up the stock market

Not really.

The market is made up of lakhs of people trying to outsmart each other. Humans, even experts, make bad decisions - and these bad decisions are made worse by emotions like greed, fear and envy when a lot of money is at stake.

> Doesn't the market "price in" everything?

Nope. There are a lot of unknowns. A steady rise in market prices makes everyone complacent. So complacent that they start ignoring the unknowns and start taking more risk. This is the sort of behaviour that leads to bubbles.

If you want to know more about market stupidity you must read Devil Take the Hindmost