CAPITAL MARKETS FOR RETIRED PEOPLE

When I had retired in 2001, I had a few Rupees to invest. As the interest rates were very less, I wanted to invest in such instruments that at least I get 10 % returns. But people suggested SIPS, Mutual funds, shares etc. I was a bit confused.

Luckily, we went on holidays and met my brother- in- law, who was a retired bank officer and an expert in shares. He explained a few tips of share investment and day trading.

I had started a dry run of buying and selling of shares for 15 days and bought some basic books on share investment. After reading these books and also seeing the results of the dry run, I came to know that the day trading is not my cup of tea and also realized that investment in shares is not for weak hearts and it requires expert business analysis before investing. But, unless you jump into the sea, you will not learn swimming. So I stared with Rs 1 lakh and started buying both day trading and also long term investment. As my regular work is consultancy and teaching after retirement, I normally cannot give more time than an hour per day for this activity. So the results of my experiences are entirely different from the regular investors in capital markets.

This started in 2001 and I am happy to dribble in capital markets. I had earned a few Rupees and lost a few Rupees. But the journey is excellent. What are my experiences? How do I react?  What I recommend?

The following suggestions are based on my experiences with the capital markets and appropriately for the retired persons, who want to earn a few rupees and also spend time usefully and actively sitting in their houses.

  • If you want to enter into capital markets, try to learn share business. It is not simply buying and selling. It is doing a PhD in business analysis and capital markets. It is a very high knowledge oriented subject.
  • Never take loan and do share business.
  • About 20 % of your total investable money can be invested in shares in stages and assume that you had lost this money. Any gains are bonus. It is participation and experience that is important.
  • Any time is good time for buying and selling. As you go on learning, you know the timings of buying and selling.
  • Selling of shares is more important than buying. The moment you get your goal, you sell.
  • Do not love the shares.
  • Do not be greedy or afraid of loss.
  • The daily share prices are dependent on rumors, daily news and likely government policies. The long term prices are better estimated and you will not be under loss on long time ( From 6 months onwards)
  • Select about 20 shares in different sectors at least two in each sector based on the various parameters and buy and sell the same as and when the price targets are met. Revise the list every year.
  • As far as possible, deal with large and medium Cap shares. Do not touch small cap shares as they are very dangerous. You can only buy them if you know their management very well.
  • Buy shares which give dividend so that you can get dividend when you cannot sell shares.
  • I have done lot of research and identified a few rules for investment. However, they are not required or your will learn during your journey of investment in shares.

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