In Blog, GOLD, NSE, Trading, US OIL

Ever since the introduction of crypto currencies, financial markets have attracted the interest of many young investors. They tend to like the exponential returns opportunities these currencies propose to generate. But they forget the very basic principles of investing. Most people think investing is the act of buying and selling an asset through a computer system, when in reality, it much more than that. It is a commitment to achieve financial goals  which require tireless physical, mental and emotional efforts. Recently a crypto currency themed on squid games, a web series.

The promoters promised to lauch a crypto currency which can be used to play a game based on the web series of the same name. Ignorant people invested their hard earned money only to see the promoters do away with their money. What went wrong? Why did many investors fall into this trap? Because they did not understand the basics of investing of which we will see something in this blog.

    • Don’t invest in what you don’t know:

    I would like to talk about few really big names in investing. Lets take warren buffet for an example, he is an equities investors. It is expected that he would know the in and outs of equities market. He kept out of other financial products which ensured that he put the maximum efforts on the field je knew about. Few of us might have heard about George Soros. He has a nickname, “The man who broke the bank of England”.

He is an expert in Forex markets. The point I am trying ti make is that, if you want to make any investment, be sure to know about the asset        completely. You can also seek expert advice if needed.

Most of us don’t know the in and out of options markets. Many don’t know about time decay or the impact of other Greeks. This ignorance may cause them a lot of money. So try to gather as much knowledge about the assets which you are going to invest in.

Many newly launched crypto currencies have these anti dumping policies which work against the basic principle of efficient market theory and the investor is expected to be aware of these things.

Beware of Ponzi schemes:  most countries, with exceptions like Japan, offer an interest to the investments which are made. India offers a return of about 4-6% interest for currency. Other financial institutions like banks and NBFCs offer a slightly higher rate of interest subject to factors like lock in period and quantum of investments. How does the stock markets fit in here? Do they offer exponentially higher returns? No, the thing is they offer better returns than the other forms of investment, which when done continuously offer returns to meet specific goals

The point here is that, no legally permitted financial scheme can offer  returns which are not linked with prevailing interest rates in the economy. Even the best funds offer 14-15% returns per annum and nothing more.


Now don’t get me wrong that I am saying it is not possible to make more returns from the markets. We can get more returns with proper analysis and risk management mechanism, which an investor should be aware of in the first place.


The one size fits all approach: Investment needs vary according to individuals. There is not criteria which is universal, though investment advisors have their own set of rules. They may propose a set of financial products according to an individuals needs and it is not to be cloned as investment needs and goals vary. It has to be a mix of various products in right proportion which could offer better protection against risks.


Conservative investors may keep their exposure to financial markets at a minimal level and investing in products offered by banks may be the right choice for them. Young investors can invest more in equities. Keeping in mind the basic principle of investment, maximizing returns while keeping risk to a minimum.


If invested in these order, we can expect to reap maximum benefits.


Happy trading!

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