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”]

Delete these apps from your Android phone

Delete these apps from your Android phone

Take a peek at your Android apps. Yes, all of them. I counted mine. I have 81 apps on my phone. Do I need all of those apps? I’m pretty sure the answer is “no.” If you’re thinking what I’m thinking, then it’s time to delete some apps.

There are a host of good reasons to clean out your apps. You can free up storage space, toss out problem apps and even remove some attention-seeking apps that eat up your free time.

You don’t have to declutter your apps until nothing is left. We’ve got some guidelines for deleting apps that should help you figure out what can stay and what should go. Keep in mind there are many different versions of the Android operating system out there, so you may need to poke around in Settings to find the right places to check on your apps.

How to delete Android apps

There are a couple of simple ways to delete apps. From your home screen, hold down on the app icon you want to delete and drag it upward toward the top of your screen. Drop it on the trash can icon that says “Uninstall.” Confirm the deletion and you’re done.

A second way to delete is to open Settings, tap on “Apps & notifications” and then tap on the “see all apps” option. From here, tap on the name of the app you want to remove and then tap on Uninstall. Confirm to delete the app.

Tap or click here to learn how to check the battery on your Android phone or tablet.

Delete social media apps from your Android phone

It’s OK if you can’t live without Facebook, Instagram or Twitter, but if you’re bothered by how much time you spend staring at those apps on your phone, then it might be time to take a new approach.

Facebook is the app that stands out here. Some users have complained that it’s a battery hog, but part of the problem may be tied to your usage habits. You can delete the app and still access Facebook through your browser. I tried this out as an experiment to see if I would miss it. I didn’t. I still check in on Facebook using Chrome on my phone, but it’s more purposeful. I no longer mindlessly tap on the Facebook app to randomly scroll through my feed.

Delete data-hogging apps from Android

If your phone is on a cellular data diet, then you want to make sure you’re not running short at the end of your billing cycle. One way to preserve your data is to remove apps that are eating up more than their fair share. To figure out if you have a culprit, head into Settings, tap on Network & Internet and then on Data usage.

Tap on “Mobile data usage” to get a snapshot of what’s using your cellular connection. Here you will see a graph and a list of apps showing the ones that used the most data over that time period at the top. For me, that top app was Chrome, but that makes sense since it’s the app I use the most when on the go. What you should look for is any app that is unexpectedly using a lot of data. That’s an app you will probably want to delete or find a less-hungry replacement for.

Delete apps that track you without permission

There is an unfortunate history of apps that collect information on users in an underhanded way. The Uber app was famously busted for this sort of behavior in 2017. Research group AppCensus issued a warning in February 2019about a group of Android apps that were tracking users while skimming around Google privacy policies concerning collecting data for advertising purposes.

Some of the apps called out by AppCensus at the time included Clean Master, Temple Run 2, Angry Birds Classic and Cooking Fever. While Google tries to stay on top of violations, it’s always going to be a moving target. Check out our Komando tips on how to stop your phone from being tracked.

Delete Android apps you don’t use

It’s easy to download an app and then forget about it. That doesn’t mean it has to sit there forever. You can find out which apps have been hiding out by opening the Google Play Store app. Tap on the three bars in the corner and on “My apps & Games.” Tap on the Installed tab and look for the sorting feature, which is usually set to alphabetical. Tap on this and change it to Last Used.

Scroll down through your App list and look for apps you rarely use or never touch at all. Tap on the app name and tap on Uninstall to remove it.

After following all of these tips, you should end up with a more streamlined set of Android apps. Congratulate yourself on opening up some storage space and for removing apps that may have become distractions. You can always reinstall an app if you end up missing it.

7 hidden Android features you should use

Your Android phone has some secret and overlooked features that you can harness to improve your mobile experience. Try out a split-screen mode, translate text on the fly and even block annoying ads in some gaming apps. We’ve got some great Android tricks and tips you need to try.

[“source=komando”]

Insights From Behavioral Finance: Parameter Uncertainty

Although behavioral finance may at first seem to be far removed from the kind of rigorous analysis required by the discipline of value investing, it is actually at the core of what value investing is all about. After all, one of the central tenets of behavioral finance is that humans are not mechanical utility maximizers, whose actions can be predicted by models that presuppose rational action. Rather, they are subject to a wide range of emotional and cognitive biases, a topic that we have explored previously.

Fuzzy models

This sentiment is quite similar to classic value investing metaphors such as “Mr. Market” and the concept of irrational exuberance. Indeed, value investing presupposes the market can be highly irrational at times, as this is what allows diligent practitioners to pick out undervalued stocks. Another key insight from behavioral finance is that of parameter uncertainty – the inherent fuzziness of financial models.

The implications of parameter uncertainty are twofold. First, it makes it very difficult to put an exact number on what the value of a business should be. Now, for most value investors, this is not a big issue. For instance, Charlie Munger (Trades, Portfolio) has often said he greatly prefers to have a range of possible values for a business, rather than a specific number.

There are many reasons why this is preferrable. For one, it is easier to do. For another, it enables an investor to establish an adequate margin of safety. And finally, it is simply the more intellectually honest thing to do. With this in mind, the exact price targets set by so many sell-side analysts begin to look suspicious. Exact numbers convey certainty and authority, which is why they appeal to so many people. But they are no better, and are often far worse, than ranges. By tying ourselves to exact targets, we narrow our margin of error and open ourselves up to a greater possibility of being wrong.

The categorization problem

The second implication of parameter uncertainty concerns the problem of categorization of investment targets. In a world where corporations are based in many different countries, how does one ascertain the risk associated with any given company? In 1990, Robert Reich, who would go on to be U.S. Labor Secretary from 1993 to1997, wrote an article in the Harvard Business Review titled, “Who Is Us?” which examined this exact question. Is a U.S.-based and listed company that conducts most of its business in the developing world more representative of the U.S. market than a foreign company that primarily employs American workers? Which is riskier?

The truth of the matter is different individuals and institutions will pick their own definitions for these things. Moreover, they will have to grapple with problems like whether Amazon (NASDAQ:AMZN) is a cloud computing company or a retailer and whether or not China should still be considered an emerging market. Of course, each will come up with their own answers. The problem is when so many different market participants have different ways of viewing the world, it is somewhat difficult to build reliable predictions of how they will react in the future.

Summary

Behavioral finance has a lot to offer value investors. While traditional thought holds that all market participants share broadly the same goals, outlooks and decision-making calculi, the truth of the matter is all of this is incredibly subjective. Parameter uncertainty is a particularly good example of this as it touches on so many different aspects of investing. As investors, there is no way to overturn uncertainty – so the best thing to do is embrace it, not ignore it.

[“source=gurufocus”]

‘Overwatch’ League Shop Goes Live With Gear From All 20 Leagues

The official “Overwatch” League Shop is now live for users in the United States, with free shipping available on all orders until Feb. 1.

The “Overwatch” league Shop features a collection of jerseys, shirts, hats, and more for all 20 “Overwatch” League franchises, as well as merchandise for the league itself. The shop also includes gear for the eight expansion franchises: the Atlanta Reign, Chengdu Hunters, Guangzhou Charge, Hangzhou Spark, Paris Eternal, Toronto Defiant, Vancouver Titans, and Washington Justice. Storefronts in other regions, including Europe, will launch later this year.

Fanatics has also released a new Profile Collection product line for each team. The New Profile Collection gear and new product lines will be unveiled throughout the 2019 season.

The Overwatch League unveiled the multi-year deal with licensed sports merchandiser Fanatics last year. The deal has Fanatics handle all fan gear sold across retail and wholesale channels worldwide via a dedicated website for Overwatch League gear.

“As we’ve gone around building out the Overwatch League, we’ve continued to figure out how we can find the right partner to take our business and build the Overwatch League,” Brandon Snow, chief revenue officer for Activision Blizzard eSport leagues, told Variety at the time. “One of the big areas to build the brands of these teams and service fans is with products and merchandise.”

The “Overwatch” League second season kicks off on Feb. 14.

[“source=variety”]