Here’s what millennials can do to make money from equity market

When the stock market was touching new highs in January 2018, Mumbai-based Vivek Mistry, 24, got tempted to invest in equities after completing his commerce graduation in 2017. He was keen to learn about investing in equities through experience.

But he didn’t have money to invest in equities. So, in March 2018 he borrowed Rs 1 lakh from his parents and invested in equity markets. That wasn’t his only mistake.

He decided to dabble in derivatives; he bought future contracts of some state-owned banks. But dismal state of state-owned banks (the news of the Punjab National Bank fraud perpetrated by now-fugitive diamantaire Nirav Modi had just been unearthed at the time) and the non-performing asset malaise in banks, in general, didn’t raise enough flags for Mistry who went ahead anyway.

Within two weeks of investing, Mistry lost Rs 50,000 as he decided to wind up his derivative positions. “I made a big blunder from my very first investments by trading in derivatives futures contract and not keeping a stop loss,” said Mistry.

When it comes to dipping fingers in equities, Mistry is not alone. For instance, smallcase.com, an online platform for equity investing, 40 percent of investors are under 27.

A smallcase is an investment instrument; each smallcase is a portfolio of stocks or exchange-traded funds that reflect an idea, theme or strategy. Smallcases platform can be found on brokerages like Zerodha, HDFC Securities, Kotak Securities, Axis Direct, Edelweiss and others.

Nearly 70 percent of stockbroking firm Zerodha’s customers are under 35.

Unfortunately, ease of technology doesn’t restrict youngsters from making crucial investing mistakes.

“Several millennial investors tend to follow the unprofessional approach like investing on random recommendations from friends / colleagues, following ace investors blindly, etc. while investing in equities and tend to register losses due to the short-term and mid-term volatility,” said Hitesh Chotalia, Head of Education at trading and investment institute, FinLearn Academy.

Stop listening to your friends; listen to professionals

One big mistake, experts say, that many commit while investing in equity markets is to listen to their friends, neighbours, uncles, aunts and everyone. Yet, we squirm when it comes to paying a fee for professional advice.

Pune-based Gaurav Kapoor, 25, followed a friend’s advice in October 2018 and invested his hard-earned money in penny stocks (those stocks whose share prices are less than Rs 10). He invested Rs 1.5 lakh after his friend had advised him to buy shares of small-sized companies on the back of expectations of rally in stock prices in this penny stocks.

But, in just two months, the value of Kapoor’s investment went down to Rs 25,000. He had learnt his lesson and later turned to a financial advisor who has now put him on a systematic investment plan of Rs 20,000 in a mid-cap mutual fund scheme.

Mrin Agarwal, financial educator and founder of Finsafe India said: “Most millennials don’t have the capabilities to analyse financials of the company, interpret the news. They often end up buying stocks on tips from friends / colleagues.”

Buy and hold is good, but learn to let go as well

An earlier Moneycontrol – CRISIL Research Ltd study published in January spoke of the merits of patiently staying invested through turbulent times.

The study pointed out that if investors who had invested in January 2007 in rising markets had panicked and redeemed in 2008 after the global market crash that happened on the back of credit crisis and had withdrawn at the end of 2008, investors would have lost 33 percent.

Those who had stayed invested till the end of the year of 2011, would have made a marginal gain of 4 percent. But if you had stayed on till the end of 2017, you would have made 16 percent. The study had considered the 20 largest equity funds at the start of 2007.

But that doesn’t mean you hold on to bad investments. Experts advise that when you buy equity shares directly, it’s better to have a stop-loss instruction in equities with a broker to sell a security after it reaches the price limit you had set.

Nithin Kamath, Founder & CEO of online stock broker, Zerodha said, “Having stop losses as a part of every trade will assist in being a disciplined trader without which some of the most common trading blunders will come to the fore. Stop losses need to be defined on a number of factors such as the maximum loss an investor is willing to take on a position, a risk to reward ratio, market volatility etc.”

Averaging stock price – not fruitful at all times

Often investors average the stock price by accumulating more quantity when the price of a particular stock from portfolio tumbles.

For instance, in 2017 Kinjal Shah, 25, residing in Mumbai decided to accumulate equity shares of Reliance Communications.

She invested on the back of reports that the firm was seeking a buyer for itself since it’s own debt levels were high. Her calculation was that if a suitable company acquires Rcom, the firm’s own share price would go up.

Happily, she started accumulating this stock at a price of Rs 32 per stock. The sale hasn’t yet happened, but in the meanwhile, Rcom’s share price has fallen to Rs 5.06 (as on closing price of 25th March, 2019). She kept on averaging the cost price by continuing with her investment in this stock.

She ended up investing Rs 50,000 and accumulated 1200 quantity of Rcom stocks. Shah says: “When I knew the company was not doing well. I should have not invested into it with certain assumptions or should have a stop loss while investing to reduce losses.”

CA Sameer Shah, CEO at Sameer Shah and Associates from Mumbai advised, “Millennial investor always needs to study the fundamentals of the company from annual reports, quarterly results and take a second opinion from research analysts who track the company before investing and accumulating the fresh quantity of the stocks.”

Mutual funds or direct equities; do SIP

If you don’t have the time or wherewithal to go through a company’s annual reports or cash flow statements, it’s best to stick to mutual funds. Numerous online platforms are available that help investors to invest in mutual funds.

Financial advisors and distributors also offer holistic financial planning to guide the millennials to invest across equities and debt.

Suresh Sadagopan, SEBI registered investment advisor and Founder of Ladder7 Financial Advisories said, “Millennials can commence investment if they are able to understand the schemes or else it’s recommended to take help of the financial advisor to identify goals and invest in a diversified portfolio analysing the risk appetite.”

Avoid the lure of direct plans in mutual fund schemes if you are just starting out. These are plans that facilitate investors to invest in mutual funds without any distributor in the middle.

Hence, direct plans come with a lower expense ratio as distributor fees are not embedded in them. Regular plans have distributor fees embedded in them as they are sold by distributors. But trying to save a bit of cost here and you risk of losing much more if you end up investing in the wrong mutual fund scheme by yourself.

But SEBI registered investment advisors can sell direct plans if you are opt for their fee-based financial plan; a much safer way to invest in equities.

Kamath said, “One of the easiest ways today to get started for millennials is SIP in mutual funds, more specifically index funds. It can be something as simple as a combination of Nifty 50 + Nifty Next 50 index funds.”

Financial experts say that as you gain some experiences and survive at least one market cycle, you can slowly consider part of your overall portfolio investing in direct equities after having exposure in index funds and mutual funds initially.

If I sell equity soon after I buy, I am gambling

A large section of investment population buys stocks in the morning and sells it in a day. This is called day trading and millennials should stay away from it.

Sadagopan said, “An investor in day trading might make money on one day and lose ten times the money on the next day. It’s not to be considered as an investment at all.”

Several millennials prefer taking a position in selected stocks for short term and plan to exit after achieving target price.

Amol Joshi, founder of financial advisory firm Plan Rupee Investment Services said, “It’s important to note that equity is affected by both micro and macro-economic factors. So, many things are not in control of investors while investing for a short period of time.”

[“source=moneycontrol”]

Money & Relationships: What to do if your adult children ask for money

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Money is known to mar even the best of relationships. The conflict over cash could invade the privacy of spouses over something as innocuous as spending habits, rend the sibling bond over a legacy leading to legal disputes, or rip apart a friendship over borrowed money. While we do not aim to span the legal scope of financial disputes in this column, we will try to deal with financial dilemmas and reduce money-induced friction in relationships, be it family, friends or colleagues.

Should you ask your colleague to return the money he borrowed and forgot? What do you do if your relative asks you to be a guarantor to a loan? What if your sibling wants you to be a partner in his startup?

In this new series, we will help you tackle the awkwardness in a relationship caused by money. To start with, we explain what you should do if your adult child seeks financial aid. Should you give him whatever he asks for without considering its impact on your own financial situation? Or should you simply decline? Here are the six questions that will help you take a decision.

1. Is it a one-time help or has it been a frequent demand?
Your decision should be based on the child’s track record regarding such demands. If this is the first time or a rare instance that he is asking for money, you could consider it. If you know him to be facing a financial crisis, or is in a phase of life where your assistance could set him up professionally, you can offer the money, but on the condition that it is returned in a pre-determined time frame. If, on the other hand, this is only one in a long list of monetary demands that have sprung up from time to time ever since he achieved adulthood, it’s high time you put an end to it.

2. Is it likely to impact your retirement?
This is probably the most crucial question to ask yourself. If you do not have spare cash and dipping into your savings could slash your retirement corpus considerably, you should politely turn down the request. No startup or business venture is worth jeopardising your retirement.

If the child needs the money to tide over a crisis, suggest alternate sources of funding: he can monetise his assets by taking a loan against his securities, insurance or gold; he can sell his less important personal assets; use his credit card to meet an emergency; or as a last resort, take a personal loan. He will probably have enough time to shore up his depleted resources, but you may not be able to do so if you have a few years left for retirement. Also, he can take a loan to meet his financial needs; you can’t do the same to fund your retirement.

3. Is the money for a life-threatening situation or buying an asset?
If it’s the former, no parent can say ‘no’. In case of a medical emergency, parents would willingly empty out their coffers for their progeny. A better option is to be prepared for medical crises and advise the child to buy adequate health insurance. If such an option doesn’t exist, try to monetise your assets first.

If, on the other hand, the money is for acquiring a big financial asset like a house or a car, make sure it is offered as a loan and that you retain the joint ownership for the specified asset. Also lay down the terms of the loan clearly, with no ambiguity over the amount, time frame or ownership.

4. Is the money to be given as loan?
Except for medical emergencies, all funds offered as assistance to an adult offspring should ideally be in the form of loans. It is likely that you have already spent a small fortune on educating your children or for their weddings. If you have empowered the child to earn his own living and establish himself professionally, there should be few occasions for him to run to you for financial help. Avoid being the financial crutch for your child and let him meet his own financial challenges or find solutions to the crises he is facing.

5 Should you have a written agreement?
If the sum you are offering your child as a loan is large, make sure that you draft a legal agreement, clearly delineating the loan terms, including the purpose of the loan, exact amount or principal being offered, interest rate, time frame for repayment, options in case of defaults, and any other conditions you want outlined.

Even if the loan amount is not big, have a written contract in place to avoid family disputes later on. Both the parties should have a copy of the agreement and it should ideally be framed with the help of, and in the presence of, a lawyer. Do not be carried away by emotion and treat it as a business transaction to avoid an unlikely fallout at a later date.

6 Are the other siblings aware of it?
While the level of privacy involving the financial help to an adult child may depend on the dynamics of the family concerned, it is advisable to keep the other siblings in the know to avoid family disputes over inheritance. Also, if you are not in a position to offer the entire sum yourself, the other siblings could be asked to join in and reduce your financial burden.

Make sure, however, that all the transactions are in writing and all the parties have a copy of the agreement. In fact, you should also include the details of the loan in your will, so that if you die before the money is repaid, the amount can be deducted from the child’s inheritance and there is no ill-will involving other siblings.

If you have a wealth whine, write to us…
All of us have been in a financial dilemma when it comes to relationships. How do you say no to a friend who wants you to invest in his new business venture? Should you take a loan from your married brother? Are you concerned about your wife’s impulse buying? If you have any such concerns that are hard to resolve, write in to us at [email protected] with ‘Wealth Whines’ as the subject.

Disclaimer: The advice in this column is not from a licensed healthcare professional and should not be construed as psychological counselling, therapy or medical advice. ET Wealth and the writer will not be responsible for the outcome of the suggestions made in the column.

[“source=economictimes.indiatimes.”]

What PR Pros Must Do Before Collecting Insights From Media Coverage

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Measuring media relations success has to start at the top. Meaning, before you start collecting insights from your coverage, you need to have a benchmark of what your ideal story is, and everyone, from the CEO level down, needs to be in agreement about what that is.

This was the central media relations tenet expressed by Visit Philly’s communications team at PR News’ recent Measurement Conference in Philadelphia. Paula Butler, VP of communications, Dana Schmidt, director of social media, and Kevin Lessard, senior analyst, have a clear idea of what the perfect story is for Visit Philly, the official visitor website for Philadelphia travel and tourism.

Visit Philly’s top-down-agreed-upon ideal story:

  • Published in a high-profile outlet
  • Has a great headline
  • Is a full-length feature as opposed to a mention
  • Includes a great image or video (preferably credited to Visit Philly)
  • And it links to one of Visit Philly’s websites, which is their perfect call to action

Obviously, every organization has its own version of what its ideal media story is. But unless you hash it out with the C-suite on down the line, measurement efforts and the reporting of metrics will quite likely result in so-what shrugs and glazed expressions.

With its ideal story in mind, the Visit Philly communications team starts by measuring the traditional things like:

• clip counts

• impressions generated

• the breakdown of coverage by media type

• sentiment

Then they dig into the earned media data they’re collecting. These additional metrics can be changed depending on what you value in your coverage, Lessard said:

Coverage by topic—This drives Visit Philly’s content strategy. What performs well, and when?

Coverage by type of placement—Visit Philly places an emphasis on driving more feature coverage (vs. mentions).

Coverage using beautiful images—If you have visual resources, make sure the media knows about them. (Visit Philly recently launched a redesign of its online pressroom, placing a big emphasis on visual content.)

Coverage conveying key messages from a corporate standpoint.

Geographic breakdown of coverage (by DMA)

Coverage in A-list media—For Visit Philly, A-list media comprises local, regional and national travel/lifestyle outlets (see image above).

All efforts to pinpoint a brand’s ideal media story and select the right metrics go down the drain without meticulous tracking and smart repurposing of coverage for internal and external stakeholders, Lessard said. Beyond sharing coverage on social media, you should consider repackaging media coverage in the form of a regular e-newsletter sent to employees and boards of directors. You helped create the good news about your organization—be creative about distributing that good news.

 

[“Source-prnewsonline”]

Do meditation apps work?

In a New York Times interview earlier this month, Deadpool actor Ryan Reynolds revealed he suffers from anxiety.

“I have anxiety, I’ve always had anxiety,” he said. “Both in the lighthearted ‘I’m anxious about this’ kind of thing, and I’ve been to the depths of the darker end of the spectrum, which is not fun.”

When asked how he manages his condition on stressful press tours, Reynolds said he is one of the over 15 million people who have downloaded guided meditation app, Headspace.

Ryan Reynolds is a fan of the Headspace app.

Ryan Reynolds is a fan of the Headspace app.

Photo: TPG

Apps designed to improve mental wellbeing have skyrocketed in popularity over the past five years. Most of these focus on managing stress and anxiety, in particular overcoming panic attacks.

However there have been concerns raised about the quality of many of the supposed mental health apps currently available for download.

Last year, the American Psychiatric Association assessed more than 10,000 depression and anxiety related self-help apps available for download, finding fewer than 1 per cent had been professionally evaluated.

Evidence for meditation programs having a moderately positive effect on psychological stress exists, although research is limited.

Last year, the federal government announced $2.18 million in funding for the Black Dog Institute to conduct a five-year trial of mental health apps involving 20,000 teenagers, assessing whether the technology can – in their words – “inoculate” adolescents from developing depression after a year of use.

However, the number of apps on the market which administer guided meditation in a potentially clinically useful way appears to be small.

A 2015 Queensland University of Technology evaluation of mindfulness-based iPhone apps, assessed the 560 unique apps found when searching for “mindfulness” in Apple and Google’s respective application stores, finding only 23 did more than simply remind a person to meditate, time their meditation, or provide support beyond a non-interactive guided meditation track. Of those 23, Headspace was the study’s top-scoring app.

Dr Kym Jenkins, president of the Royal Australian and New Zealand College of Psychiatrists, says problems can arise if people use smartphone apps as a substitute for gaining face-to-face mental health care.

“Mindfulness mediation apps can be useful for some people, but for others, when unwell, using these apps or even engaging in mediation its self can be quite difficult,” she says.

“Apps of this kind are not a substitute for professional health care. If you are concerned over your mental health then you should seek help from your GP. A GP can help you work out what is going on, and refer you on for further treatment by a psychiatrist or psychologist.”

Some mental health professionals have started to integrate the apps into their therapy programs. Melbourne clinical psychologist Dr Melissa Keogh recommends her clients complete 10 minutes of mindfulness meditation each day, and encourages them to use the Australian-made app, Smiling Mind.

Similar to Headspace, Smiling Mind is a free mindfulness meditation app. Developed by a team of psychologists, and offering meditation programs for children, teenagers and adults, it has been downloaded over 2.6 million times.

(The 2015 QUT study found Smiling Mind to be the second-best app for mindfulness meditation, after Headspace.)

For Dr Keogh, apps do not replace sessions, but provide her clients with a more structured way to do their prescribed daily meditation. She says her clients report a reduction in stress and anxiety symptoms when using the app.

“Before the advent of the iPhone and apps I used to teach deep breathing exercises and progressive muscle relaxation via the reading of a script in-session, to help clients with stress and anxiety,” she says.

“While clients enjoyed and benefited from these exercises, they often struggled to stay the course outside of [their] session because the mind does have a natural tendency to wander… the apps we have now are great in this way as clients are guided the entire way through their meditation, although that said, it does still require some level of discipline and dedication to keep up the practice.”

[“Source-smh.com”]