Lessons on investing learnt from Hindu and BusinessLine

Today I read an article in BusinessLine and felt that they were apt for today’s investment horizon. The fifth lesson is somewhere I am lacking, but should focus more.

Lesson 1: Go for a balanced asset allocation. A 100 per cent equity portfolio can suffer vicious swings, but a 100 per cent debt portfolio may not deliver enough returns.
Lesson 2: With mutual fund investments, take higher exposure to open end schemes that give you the flexibility to exit if the performance sours.
Lesson 3: Make stock market investments only from the surplus you can afford to lose, that too after setting aside money in safe options.
Lesson 4: With interest rates sinking and a correction imminent in property prices, a short wait may allow you to obtain better bargains on your property purchases
Lesson 5: rock bottom equity market is the best time to invest; sticking only to safe investments may prevent you from reaping great returns that can help you with your long-term goals

Shyam also has recommends in his article in Hindu today to go and invest in NIFTY BeES.The following facts provided by Shyam wants to my to evaluate this option.I added some of them here for my reference.

  • Buying and selling is very easy. You just need to have a demat account.
  • There is no entry or exit load for the NIFTY BeES, and the annual expense ratio at 0.5 per cent is among the lowest compared to other mutual funds
  • Mutual fund investments can be made only based on the day’s closing NAV. Exchange traded funds can be bought or sold at any point during the day at prevailing Index levels.
  • Individual stocks are subject to stock specific risk or sector specific risk. NIFTY BeES is more like diversified mutual fund and comes at lower price
  • as an investor it is impossible for you to know what stocks the mutual fund would invest in, pre-facto. Whereas in the NIFTY BeES, the investor knows exactly where his money will be invested — in the 50 stocks that make up the NIFTY Index!