Moneylife Stockletters
For those who know the risks and rewards of stocks, but have no time to research
Moneylife Stockletters
Will be shared soon
DESCRIPTION
Elephant
Focus:
Select stocks from Nifty 50
Lion
Focus:
More large-caps, some midcaps
Antelope
Focus:
More mid-caps, some large caps
Panther
Focus:
Small caps and / or low-priced stocks
Tortoise
Focus:
Value stocks, mostly small-and mid-caps
See comparison
What you get with each subscription
An email alert every Saturday evening, to view on the site
Weekly market view
A shortlist of stocks to invest in with basic data
Brief description of the companies
A web-based SIP/Lumpsum tool
faq
  • Is this service for me?

    Direct investment in stocks is rewarding but risky. A portfolio of stocks as a whole may do well over the long term but individual stocks may inflict losses from time to time. Most importantly, there are prolonged periods when the portfolio too will suffer losses. It could happen because we have made a mistake or you have started to invest at the wrong time. Even those with experience in investing in stocks are unable to handle the losing periods or losses in specific stocks. Do understand that you may have to give a portfolio as a whole, several years to show results and that during this time, many stocks will be bought and sold at losses. If you don’t understand this, this service is not for you.

  • Which stockletter should I buy?

    We have mentioned what each stock letter stands for in the link ’see comparison’ above. Both Lion and Antelope have a mix of large-cap and mid-cap stocks though there are more of large-caps in Lion. Tortoise focuses more on value stocks, which may belong to any cap-size. Stocks in Panther are small-cap stocks and more volatile, leading to large gains and losses depending on when one subscribes. Only mature investors with several years of investing experience may go for Panther and invest a small part of their portfolio in Panther stocks.

    The main objective of Elephant is to beat the Nifty 50 through
    a) elimination of poorer quality stocks
    b) timing the better quality ones and
    c) Cash calls.

    If you are interested in picking and choosing from different stockletters, you can buy more than one. However, if you do buy all five, you will have too many choices and may end up asking us for a shorter and combined list of stocks from across the four stockletters. Unfortunately, we will not be able to guide you to a combined shortlist, even if you are an MAS subscriber.

  • How many stockletters subscription is recommended?

    We recommend one or at the most to two if someone is new. Some investors with long years of experience may choose to buy more than that and then pick and choose the stocks according to their judgement.

  • How many stocks are there in each stockletter?

    Lion, Antelope and Panther has upto 16 recommended stocks. There could be a few common stocks across these three stockletters. Tortoise will have a shortlist of 20-odd value stocks. It can go up to 25 as well. Elephant will have a list of 25 stocks chosen from Nifty and Sensex.

  • How can I use the Moneylife Stockletters

    You should use the stockletters simply as source of information and research. In that case, you would treat this as a list of quality stocks shortlisted by us, which may merit further research and analysis and then possibly could be chosen for investments. Remember, we are merely using our screening system to offer you a shortlist of stocks. If you wish to act on this shortlist, please consult an investment adviser who would guide you about the appropriateness of these stocks, in conjunction with your risk profile and suitability of stocks as an investment product. These stockletters as research product is for those who understand the rewards and risks of investing in stocks for the long run and use the list for doing their own research with their own time and resources. It would not be possible for subscribers to do their research through us.

    Subscribe to stockletters

  • What is included in the stockletters

    Each stockletter consists of two pages. The first page is a summary of the market trend and highlights any change in the list. The second page is a summary of financials.

    As and when any new stock is added to the list, there would be an additional three page report sent along with that week’s stockletter. The 3-page additional report would comprise of information about the company, our investment rationale and the financials of the company. There would be no report for Elephant because these are well-known high quality stocks. We are bringing in our skill of timing and selection.

    It is important to know what you will not get. You will not get detailed research reports, analysis of quarterly results or notes on ongoing corporate development, the kind that stockbrokers produce. The stockletters are meant for subscribers who want a list of quality stocks, which they can choose to research and invest in. They don't want to be inundated with more information, given that everybody is suffering from information overload. We follow a system-driven or a quantitative approach to stocks. We use a proprietary ranking system which to filter stocks as per multiple parameters. If you are interested in detailed explanation and long research reports, these stockletters are not meant for you.

    Do you give price targets?
    According to us, buying stocks is only a matter of judging odds. It is a game of probability where we try to ensure that we have most of the factors in our favour so that when the market rewards us we gain more and when the market does not reward us we lose less. We have not come across any scientific way of setting a "target" for a stock. Nobody has tested whether targets actually work. By putting targets, brokers add an element of certainty to a very uncertain enterprise. This is because our mind craves for certainty and the broker satisfies this desire by putting a number. It is financial astrology in disguise. However, after we have made up our mind about exiting, we may give a price target to avoid all of subscribers trying to sell at the same and triggering a fall, especially in case of stocks with low liquidity.

    Can I get a combined shorter list of recommendations if I subscribe to all the stockletters?
    No, we cannot offer a customised list of stocks because our active list of stocks will keep changing. A customised portfolio means tweaking the portfolio every few months with new exposures and active monitoring. This amounts to investment advice, which is not the scope of this service.

  • Buying Process

    What is the approach behind the stocks selected?
    What we generally look for are these features:
    1. Growth:A higher sales and profit in 4 out of last 6 quarters
    2. Value: market cap/ cash flow. It shows how the market is valuing the case flows. Lower the better.
    3. Return: Cash flow or net profit / capital employed. Its shows how much money the invested capital is making. Higher the better.

    This DOES NOT MEAN that stocks that meet these criteria WILL go up. It also DOES NOT MEAN that other stocks which do not share these criteria WILL NOT go up. It's a game of probability where we try to get the odds in our favour.

    Tortoise stocks are selected on the basis of:
    1. Stable quarterly revenues and profits
    2. Historically low valuation:
    3. Strong cash flows:

    Having shortlisted stocks on this basis, we then apply our knowledge of managements, including corporate governance. We don't suggest a short-selling opportunity. Our understanding of the management quality and integrity comes from a careful study of financials. For instance, we avoid companies with debt or those that are not earning high returns on capital or paying low taxes. We do not meet the management of companies that we shortlist. The research team is headed by Mr Debashis Basu.

    How do we know when to delete a stock from the stocks?
    Deletions from the shortlist are spelt out clearly as and when they occur.

    Will I get one new stock name every week?
    No. There is a difference between stocks and vegetables. Vegetables are good when they are fresh. Not stocks. The best stocks have been around for a very long time like Nestle or Hindustan Unilever or Asian Paints.

    How are these stocks different from the stocks given in Moneylife weekly online magazine?
    Moneylife weekly online magazine does not offer shortlist of high quality stocks. It discusses general prospects of particular stocks / industry.
    You should never average smaller stocks or commodity-type stocks. You can only average stocks that have proven themselves as ‘long-term compounders’, those that have recorded high compounded annual returns. There are a small number of such compounders that suddenly become available cheap, usually because of an external shock. It could be Nestlé getting hit by Maggi or consumption stocks getting hit by demonetisation or drought.

    How Much to Invest?
    Our approach is to invest an equal amount in every stock suggested, to the extent possible. For instance, if we have selected 16 stocks, and you wish to invest Rs80,000 a month, you must aim to invest Rs5,000 in each stock, to the extent possible. So, if X is valued at 2200, you would buy 2 shares. If Y is valued at Rs 690, you would buy 7 shares. The key is to have an equal exposure per stock. The stock tool will do this automatically for you.
    Once you enter the monthly amount, it will tell you how much to invest in which stocks, starting from the lowest in rupee terms to the highest. However, this may mean that you may have some cash left, shown as "Excess Cash" at the bottom of the table. You can use this to buy more of the lowest-priced stocks.
    Currently the stock tool is available only for Antelope, Lion, Panther. We will launch a SIP tool for Elephant soon. We have not yet integrated it for Tortoise and may not do so in future. This will remain a standalone product.

    How to Handle New Entries and Exits?
    At any time, we may have 1. active stocks 2. empty slots and 3. several stocks on hold. Our recommendation is to take equal proportionate exposure to active stocks and keep the exposure relating to empty slots and stocks on hold, in cash. Here is what we mean:

    Maximum slots: 16. Investible amount : 80,000. Per stock investment : Rs5000. Recommended stocks: 10, On hold: 3, No recommendation: 3. Recommended stocks: 10, On hold: 3, No recommendation: 3.

    Use the tool only to divide for Rs50,000 (for 10 stocks) and keep the balance cash (Rs 30,000) for new recommendations.

    New Entry: If we make a new recommendation, recommended stocks become 11. So, invest Rs30,000 (surplus cash)/6 (empty slots) or approximate Rs5000 in the new stock and keep the balance cash (Rs25,000) for new recommendations.

    Exit: Subsequently, if we sell a stock say for 6000 (now we are invested in 10), keep this in cash.

    New entry: When we have a new recommendation (we go back to 11), how much to invest in the new stock? We have Rs25000+6000 in cash or Rs31,000 for six slots. So, we invest Rs31,000/6 or Rs5167 in the new stock and keep the rest in cash.

  • Selling Process

    As we have mentioned, different subscribers come and go at different points over which we have no control and so, we cannot attempt to ensure high returns for all. While starting your investments you must remember the following about exits:

    1. We are very mindful of the fact that stocks don’t keep going up in future, no matter what kind of returns they have recorded in the past. We need to keep an eye on the exit door.
    2. In fact, the higher and more solid the past returns, the greater is the complacency among investors. Our objective is to sell stocks the moment their earnings cycle starts to weaken. Usually, prices start to weaken in advance. In the past when we haven’t been mindful of this, we have paid a price. We will recommend a sell when either earnings or prices start to weaken.
    3. You should be in a mental frame to sell at that time, whether you have bought recently or not and sitting on gains or not.

  • Investment Horizon

    How long should one stay invested for best results?
    An equity portfolio must be held for the long term, which we define as at least 5-7 years, depending on the stock valuations at the start of your investing period. However, this does not mean we will hold the same stocks for 5-7 years. The performance of the shortlisted stocks should be judged on the basis of the overall portfolio over 5 years at least, not on the basis of short-term price movement of individual stocks.

    How many stocks are changed every year from the list?
    We hope to change only 3-4 stocks every year. Additions are made as and when any stock meets our investment criteria. Our stocks come under review after the quarterly and yearly results are declared. At that stage we need to evaluate whether the stocks are still worth keeping in the list. Also, in very rare cases, we may shortlist a stock expecting a trigger; we have to get rid of it if the event does not happen.

  • Expected Returns

    Equity markets are dynamic and there are no guarantees. Losses are a part of equity investing. The returns you make will depend on:
    1. Which stocks you pick up for investment
    2. When you start the research and investing process

    Different subscribers will get different results depending on these two factors. Also, anyone investing when the market is expensive will have to be patient about returns. After you buy a stock, it may fall. No one can take into account the timing for every individual and ensure that every stock in the list remain in the black. The shortlist should be judged by the performance over the long term and not by the short-term returns of specific names that you may choose to follow at a particular time.

    What is the reason behind the strong historical performance of the shortlist and will it continue?
    The reason behind this performance is partly favourable investment climate. Future returns will be lower.

  • SIP/Lumpsum in Stocks

    How much should one invest in each stock?
    You should invest equal amount in every single stock whatever your final shortlist may be. For instance, if we have selected 30 stocks, and you wish to invest Rs150,000 in all, you must invest Rs5,000 in each stock. To put it differently, if you are investing Rs 5000 per stock and TCS is valued at 2500, you would buy 2 shares. If Asian Paints is valued at Rs 500, you would buy 10 shares. The key point is exposure per stock is Rs5000, not the number of shares. We have facilitated the process by creating stock tools (except for Tortoise) for the purpose. This can also be used for one-time investment. Panther stocks may not be the right for SIP. Please use your discretion.
    Antelope Lion Panther, Elephant SIP tool (to be launched soon)

    How should a new subscriber interpret the names given in the stockletter?
    We identify from the existing list that are still worth it. New subscribers can research these. We also identify the stocks that are not worth from the existing list because of fundamental or valuation reasons. New subscribers can ignore these. New subscribers can also invest in new stocks added to the list.

    Most stocks seem to have already run up sharply. Can one enter them now?
    It is illogical to think because they have gone up, they will not up go up in future. Every month and every year, HDFC Bank seemed expensive and “already run up sharply.” But it still keeps going up. The reason is quality. Stocks with strong earnings, will keep going up, even after they have already gone up. Of course, stocks can temporarily go down any time after your purchase, whether they have run up or not. That is the nature of stocks. This is why it is important to follow these two principles about stock investing 1. Investing only that money you will not need for 3-5 years 2. Not looking at the share price in the short term.

  • Risk Issues

    How will I know that the stocks in the shortlist are appropriate for me?
    In such situation, we advice you to take the MAS premier membership so that we can advise you.

    How risky are the stocks in the stockletters?
    Stocks by nature are risky and volatile over the short-term and can lead to losses. But loss of capital in good quality stocks is not just a function of stock selection but also how long a stock is held and at what valuation they are bought.

    What if the market is too expensive when I start subscribing to the stockletter?
    High quality stocks decline along with the market only in severe bear markets. In normal market declines of 10-20%, many high quality stocks do not decline. They may fall a bit, move sideways and go up again. We shortlist high quality stocks available at reasonable valuation.

    What else should I know about risk?
    You should know the risks investors create for themselves. "Human nature" is inimical to smart investing. Studies in evolutionary biology have shown that our brain is hardwired for survival but not dealing with complex issues like risk and return. You may like to watch this video to set your mind right once for all and this about buying stocks

  • Price & Delivery

    How much do the stockletters cost?
    Annual Price of ANY ONE (Panther OR Lion OR Antelope OR Tortoise OR Elephant) Rs.5310
    Annual Combo Price of ANY TWO (from Panther, Lion, Antelope, Tortoise, Elephant) Rs.8496
    Annual Combo Price of ANY THREE (from Panther, Lion, Antelope, Tortoise, Elephant) Rs.12744
    Annual Combo Price of ANY FOUR (from Panther, Lion, Antelope, Tortoise, Elephant) Rs.16992
    Special Annual Price of ALL FIVE (Panther, Lion, Antelope, Tortoise, Elephant) Rs.21240

    Can I share the stockletter?
    The stockletters are meant for a single user and is backed by years of research. Hence, we urge you not to share them. If we come across such we will suspend your subscription.

    How do subscribers get the stockletter?
    You can access your stockletter from your MAS dashboard by logging in with your registered email id and password https://profile.moneylife.in/#view

    What is the frequency?
    You will receive the link to view your chosen stockletter, every Saturday evening, via email.

  • Subscribers Questions

    What if I have any queries about specific stocks?
    Well, we would rather let our overall performance do the talking. We have numerous subscribers and we will not be able to respond to individual requests/ additions / information for clarifications.

    What if the price of stock I have bought has fallen sharply ?
    1. Our suggestion is to invest in all the stocks or as many stocks as possible of a particular stockletter.
    2. Since this is the advice, we wish to be judged by the overall performance of the portfolio, not individual stocks selectively chosen by subscribers.
    3. If a stock has fallen, we will review the specific news or financial performance linked to it and if needed we will comment upon it in the weekly stockletter. We will not be able to reply to emails asking us what to do about individual stocks that have declined. Please remember that we are invested in almost all the stockletter stocks in our personal or organisational capacity and we are as much concerned as you are.

  • Disclaimer

    The Stockletters are part of multiple services offered by Moneylife Advisory Services Private Limited , a SEBI-registered portfolio manager (INP000006873) and a SEBI-registered investment advisor (INA000003429), having SEBI-registered research analysts on its rolls.

    The stockletters are presented as a model portfolio and not as an investment advice and are for information purposes only and none of the stock information, data and company information presented constitutes a legally binding recommendation or a solicitation of any offer to buy or sell any securities. Although information has been obtained from and is based upon sources we believe to be reliable, we do not guarantee its accuracy and the information may be incomplete or condensed. All opinions and estimates constitute our judgment as of the date of the report and are subject to change without notice. Information presented is general information that does not take into account your individual circumstances, financial situation, or needs, nor does it present a personalised recommendation to you. Individual stocks presented may not be suitable for you. Please read the terms and conditions before subscribing.

    Cancel within two issues: You can cancel your subscription within two issues. We will return your money after deducting Rs150 on each stockletter for payment gateway and handling charges.

    Switch within two issues: You can switch your subscription within two issues. This would be permitted only ONCE during your subscription period.

    You can send us your request for Cancellation /Switching over email to [email protected]

GUIDELINES
Since 2012 when we launched our stockletters, we have often received numerous queries about different aspects of stock investing. We have decided to compile the most important of such questions and our replies, for easy reference. If you have any questions that are not addressed here and you would like them to be included please, send an email to [email protected] with the subject line: “Stock investing query”

  • Timing

    With the market in a correction mode, would it make sense to book some profits and wait for a re-entry when valuations are lower?
    How would you know when to re-enter? What if the stocks you sell don’t go down and actually go up?

    Is it a good time to jump into this correction to invest lumpsum in stocks or should I wait for another few days hoping for a further correction?
    Such fine timing is neither possible, nor necessary. You need to invest regularly over the very long term, especially if age is on your side. Also, most salaried employees do not have a large surplus to invest. We have only smaller amounts to invest every month. Timing will not have much of an impact on small amounts over the long term.

    Is there any good time, like morning or afternoon and what day of the week is good to buy?
    It makes no difference. Such short time differences do not meaning anything. They are random. We need not have a very precise and mechanical approach. Our approach is only to be somewhat disciplined in:
    1. Investing regularly
    2. In a list of high quality stocks.
    3. More or less equally, to avoid deliberate skewness
    After that, it is largely a matter of chance which stock will do better than the others. Hence too much precision is misplaced.

    The strong bullish sentiments have made me jittery instead of boosting my confidence. I have not invested a single penny in any of the stocks since my subscription because I feel the market is a bubble waiting to burst when the ground realities in the economy will catch up with the markets. Even then I have been proved wrong with each passing day with the market scaling new peaks. Shall I wait for the market to crash and then go for the stocks when their prices have come down?
    You are making too many assumptions here, some without basis. How do you know the market is in a bubble? A bubble or even an expensive market is known only on hindsight. Also, after a shock decline, stocks and overall market will always look expensive because they are based on recent low earnings.

    Even assuming that the market is “expensive”, what is the connection between expensive markets and returns from individual stocks over the medium to long term? Even in an expensive market, many stocks will continue to do well. It is a common fallacy to confuse between market valuation and valuation of individual stocks.

    High quality stocks decline along with the market only in severe bear markets. In normal market declines of 10-20%, many high quality stocks may fall a bit, move sideways and go up again. We shortlist high quality stocks available at reasonable valuation which will beat the market. They will do this by falling less with the market and rising more. Having said that, stocks may go down any time after your purchase, whether they have already run up or not. That is the nature of stocks.

    Nobody knows in advance, the kind of returns a stock will fetch. But a company, which keeps growing its revenues and profits, is an exceptional opportunity. Its stock will be a buy at almost all levels. To stay away from such a stock based on your personal opinions of “bubble” and “ground realities of economy” will be a mistake.

    Now the market is at all-time high and most of the stocks recommended have also gone up, is it proper time to invest now irrespective of market conditions?
    It takes a lot of experience and expertise to 1. understand “market conditions” and then 2. correlate such conditions to the future movement of individual stocks. We do not time the stocks portfolio as a whole because individual stocks may not be correlated with the market movements. When we think a particular stock is overvalued we exit. Also, if we do not find good companies we stay in cash. That is how market condition gets reflected.

    What will happen if I start a SIP of stocks blindly irrespective of the market conditions?
    You will do well because we will suggest exits as well, not just entries.

  • Investment Process

    Should one invest every month or on a lumpsum basis?
    It depends on how much money you have and when. Salaried employees have money at the beginning of the month. In that case, monthly SIP (systematic investment plan) is the best way. Investing a lot of money as a lumpsum is not a good idea unless stocks are very cheap, which is rare.

    In case I want to invest on a lumpsum basis, how will I know the right time to invest in stocks?
    Opportunity to invest on lumpsum basis comes once every few years. But we have never come across investors who can patiently wait out the rise and rise of markets keeping all the money safely in bank waiting for the market to crash and then invest lumpsum. It is neither prudent nor practical.

    How should I deploy one-time income (like bonus)? Should I invest lumpsum? Or, stagger it over few months or say once a year, till I receive next bonus?
    Invest it as an SIP over six months or so.

    Is there a recommended proportion of allocation of my corpus that you recommend across different cap-sizes?
    No, because different investors behave differently, especially when recommendations don’t work as expected. Small- and mid-caps offer higher reward, which come with higher risk. Such risk-taking ability is not inborn. It comes with age and experience. Investors must have an understanding of their own experience of market risk and choose an allocation accordingly. Absolutely new investors must invest more in mutual funds and very little in stocks and that too blue-chips where permanent loss of capital is less. If you are an experienced investor, allocate equally. Many aspects of investing are simply a matter of approximation. It also depends on the market climate.

    Can I invest monthly fixed amount as SIP or can I invest a variable amount in the current market conditions?
    All stocks in the active list are worth buying for the long-term. We choose high quality stocks, which will go up over time. If a particular stock is overvalued, we suggest an exit. Also, if we do not find good companies we stay in cash. Market conditions are not exactly correlated to the movement of individual stocks, especially high-quality stocks.

    What is the minimum amount to be invested in stocks to get decent returns?
    The investment amount depends on one's experience in investing in stocks and the amount of regular surplus. Most people invest too little because they don’t understand the risk and rewards of stock investing and the role of good-quality stocks in creating long-term wealth.

    What is the criteria to invest in stocks which have already increased by 5x or 10x?
    Such stocks have a lot of growth ahead of them still. That is why we continue to recommend them. Besides, there is a reason these stocks have done so well. It is because they are businesses of the highest quality and we want to be part of such businesses. These are rare gems.

    What will happen if I start a SIP of stocks blindly irrespective of the market conditions?
    You will do well because we will suggest exits as well, not just entries.

    What is the trigger point to book profits from the stocks?
    We monitor each stock very closely every week and will recommend an exit when needed. You don’t need to spend time studying trigger points.

    What is the investment duration for each stock?
    We have no pre-fixed time horizon.

  • Buying And Selling Process

    Should I buy stocks from BSE or NSE platform?
    Large-cap well-known names and be bought either in BSE or NSE. NSE has more participants and there can be more liquidity in certain stocks. Also, some stocks may not be listed on NSE. These can only be bought in BSE.

    Should I put a market order or limit order? What is preferred order validity - Day or VTC?
    Use a limit order. You know exactly what price you are buying at. Day order expires during the day. VTC is valid till cancelled. Minor differences in purchase price will not make much difference to long-term returns.

    Why don’t you give target prices for exit?
    We don't know of any scientific basis for giving target prices. Those who do, give random figures. Nobody has tested whether such targets make sense.

    If a stock falls should I average?
    We are against averaging. We suggest investing equally in all stocks and not tamper with the allocation unless there is a sell recommendation.

  • Brokers

    How to choose a stockbroker?
    We are forced to go through stockbrokers for investing in stocks, not because they offer something useful but because the regulations do not allow us to buy stocks directly from the exchanges. In fact, brokers have enormous potential to do harm because regulations give brokers a lot of powers to play mischief. And grievance redress system being poor you will not recover your money lost through a crooked broker taking you for a ride. Here is what you should remember:
    a. Don't take advice from brokers on market condition, economy or individual stocks. They don’t know more than you. They just guess. Research reports and target prices usually are a hit or miss. Their objective is different from ours, almost always exactly the opposite.
    b. Don’t pledge securities and don’t get into margin trading.
    c. if possible don’t sign power of attorney (PoA) for your demat account.
    d. Avoid futures and options unless your are a hard-core investor or trader and are willing to devote a lot of time to learn from your mistakes.

    If you use zerodha.com, all these problems are automatically eliminated because they leave you alone. They are also very customer-oriented, which is unique among brokers. If not, choose a well-known broker and just use them to buy and sell shares, not for any other expertise.

    Is PoA prone to be misused at times by the Depository Participant?
    In the past there have been rampant cases of misuse, which we have documented. Please see the links below. These are mostly unauthorised trading and selling off shares to cover brokers’ losses.
    https://www.moneylife.in/article/powerless-by-poa/1366.html
    https://www.moneylife.in/article/wiped-out-by-motilal-oswal-an-aggrieved-small-investor-won-in-consumer-court-but-got-shafted-by-sebi/28666.html
    You may like to read this post from Valuepickr
    http://forum.valuepickr.com/t/story-of-a-mans-life-savings-wiped-out-by-motilal-oswal/11240/10
    After sustained campaigning by us for years, rules changed
    https://www.moneylife.in/article/standardising-poas-long-overdue-development/2381.html
    Problems continued however.
    https://www.moneylife.in/article/brokers-linked-to-banks-thumb-their-noses-at-sebi-and-make-their-own-rules/5436.html
    https://www.moneylife.in/article/brokers-blatantly-ignore-sebi-instructions-on-power-of-attorney/5465.html

    How can I preempt PoA abuse?
    The long and difficult process is to check the contract notes brokers sent by email and check the holdings daily, apart from locking demat accounts. A better way is to use well-known brokers but remember to only use their platform -- never take their advice. The best way is to use Zerodha as your broker which has a clean business model and so they don’t need to mess with your demat account. If you are still uncomfortable, find a broker who will allow non-PoA account.

  • Assets

    Stocks, Funds or Both?
    If you have don’t understand the volatility of stocks and cannot accept losses from stocks, you should invest in mutual funds. This is because individual stocks are volatile and one or two cases of losses cloud the mind. To clarify, if 9 stocks have gone up by 15% and one makes a loss of 25%, your mind will be occupied by this loss rather than the overall return of the portfolio. You will not take the trouble to see the overall result of the portfolio. But when you are investing in mutual fund, you will not go and check which stocks have made money and which have not. You cannot even get this information. You will only know of the net result (NAV). Many individuals write to us what to do with our sell recommendations. They may have just taken a membership recently, started buying stocks, which have gone down. If we recommend a sell, they cannot accept a loss and sell. This situation will not arise if you invest in an equity fund because you wont know which stocks are being bought and sold and certainly not what is being sold at a loss. The other issue about stocks is they go through a lean period. You may lose faith in stocks at that time.

    On the other hand, we have very strong views on how mutual funds are run. We lose our sleep when a stock does not perform or when we have not exited on time. We don’t think mutual fund managers have the same kind of involvement. Stocks are better for those who understand them. Mutual funds are better for everyone else.

    Hence, we do not suggest mixing mutual funds and stocks. You have invested in both stocks and mutual funds and if you want to keep it that way, one idea would be to simply divide your money 50:50. There is no rational basis for this or any other ratio. Do what is convenient and whatever you are comfortable with.

SAMPLE

The Stockletters are part of multiple services offered by Moneylife Advisory Services Private Limited , a SEBI-registered portfolio manager (INP000006873) and a SEBI-registered investment advisor (INA000003429), having SEBI-registered research analysts on its rolls.

The stockletters are presented as a model portfolio and not as an investment advice and are for information purposes only and none of the stock information, data and company information presented constitutes a legally binding recommendation or a solicitation of any offer to buy or sell any securities. Although information has been obtained from and is based upon sources we believe to be reliable, we do not guarantee its accuracy and the information may be incomplete or condensed. All opinions and estimates constitute our judgment as of the date of the report and are subject to change without notice. Information presented is general information that does not take into account your individual circumstances, financial situation, or needs, nor does it present a personalised recommendation to you. Individual stocks presented may not be suitable for you. Please read the terms and conditions before subscribing.