What Investment mistakes you made that you want others to avoid?


VivekSood

WFH FTW!
Staff member
don’t forget to live the “now”. even if you have couple if crores in your old age you wint be able to spend them on anything other than hospitals and nursing homes.
The idea of making money is to enrich life with experiences and happiness.
Yes sir :woot:. Balancing everything is critical.
 

raksrules

Well-Known Member
Veteran
don’t forget to live the “now”. even if you have couple if crores in your old age you wont be able to spend them on anything other than hospitals and nursing homes.
The idea of making money is to enrich life with experiences and happiness.

Yes I am not investing with the aim to have a huge corpus (well it is needed though) when I cannot even probably walk properly. I had plans of international trip last year and what not but thanks to covid all is put off.
 

letmein

Well-Known Member
Adept
Bruh, I can't even with this thread anymore.

After the first few pages I had sworn off it, but I keep coming back to it like a fly smelling something. And it doesn't fail to give me a stomach ache every time.

When this thread started, I written that there was some really bad advice being posted.

df.JPG

My mistake. I really should have stepped in then and there. Instead, I had hoped some other experienced investors would have stepped in, instead I was lazy.

Sarcasm didn't work either.

2.JPG


Third time's the charm.

I'm sorry to be so blunt, especially since most of the bad advice is coming from a mod. I will reiterate and bold this:

Investing in pure equity (doesn't matter if it's directly into stocks or via equity MFs) is not the answer to all your investment decisions!

I will add this to my statement: Equity investments are NOT bad, and they should be a part of (almost) every investor. But to say that investors should forgo every other asset class is just plain foolishness.

I take special offence to these blanket statements:

1.JPG

3.JPG



Equities give 12%-25% returns? Sure. You know what gives 1200% returns? Crpyto. You know what gives 12000% returns? The ponzi scheme I'm about to launch (for the first 10 people only tho).

Can you guarantee those returns? Absolutely not. And if you rely on these past returns as guaranteed returns and use them to ascertain your future returns, more often that not, you'll end up screwed.

Which is why debt instruments (like FD, EPF, PPF) and other assets like Gold or RE should be an important, nay integral, part of your portfolio.
(Disclaimer: I don't invest PPF or NPS, because I don't like the lock-in period. Instead I invest in something even more conservative for my debt portfolio - liquid funds and FDs).

Please just look at the yield curves of the instruments mentioned. Notice how two are smooth/ almost guaranteed, the equity linked is allover the place.

47819_20201218-the_plan-graph__w1000__.png

Thought experiment. I have three kids aged 1/ 6/ 16 as of today. I want to save money for their education.

What should I do? Put everything I have in equity?

If I go by the advice given here, the kids aged 1 and 6 (may)be fine.

The kid aged 16 (may)be screwed.

What if the market tanks when he turns 18? The 10 lakh I saved for him is now only worth 6 lakh. Should I just tell him to chill for a year while papa replenishes his education fund?
(PS. If your answer if to move money from Kid aged 1 and 6, just forget it).

Instead, I should have put the 16 YO corpus in a safe debt instrument, split the 6 YOs between equity and debt, and put most of the 1 YOs in equity.

Is this a guaranteed strategy? Absolutely not. But it is a much safer way of investing your hard earned money.

Please, please read up on your own and don't rely on advice from internet strangers (that includes advice by me as well). I can understand trusting people on TE if the question 'What phone to buy' or 'Is a 650W PSU enough for my build?' But when the title of this thread is "What Investment mistakes you made that you want others to avoid?", and my answer to it will be 'Please don't follow the advice of internet strangers, especially on this thread.'

Unlike a PSU or a phone, the quantum involved could be 100x or 1000x.

You can't RMA a bad investment.

You know, I used to think the mods on r/indianinvestments were a bunch of stuck up jerks because of how strict they are wrt to posts on their sub. Now I sympathize with them. Having to moderate hundreds/ thousands of people, who come and post their poor quality advice day after day would be enough to give anyone an ulcer.

I will leave this long post with one final example as to why diversification is not important, if not absolutely necessary.

The Mint Asset Quilt is an annual survey of 10 asset classes, ranging from equity to debt to tangibles (no crpyto here as of yet).

This was the last year's snapshot. Notice the performance of equity vs other asset classes year-on-year. Now imagine if you're invested 100% in equity and need money the very same year equity has tanked.

11.JPG


This was discussed on Reddit as well. One user did the CAGR of all asset classes as well. Please note the returns:


Even after adding the dividends as mentioned by one of the comments, equity doesn't outperform other stable assets by a significant margin.


AA.JPG

If people think investing 100% in equity and nothing everywhere else is still right for them then good luck and may God help you.

This will be my last post on this thread. Good luck to everyone on their investment journey.
 

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VivekSood

WFH FTW!
Staff member
Bruh, I can't even with this thread anymore.

After the first few pages I had sworn off it, but I keep coming back to it like a fly smelling something. And it doesn't fail to give me a stomach ache every time.

When this thread started, I written that there was some really bad advice being posted.

View attachment 103378

My mistake. I really should have stepped in then and there. Instead, I had hoped some other experienced investors would have stepped in, instead I was lazy.

Sarcasm didn't work either.

View attachment 103390


Third time's the charm.

I'm sorry to be so blunt, especially since most of the bad advice is coming from a mod. I will reiterate and bold this:

Investing in pure equity (doesn't matter if it's directly into stocks or via equity MFs) is not the answer to all your investment decisions!

I will add this to my statement: Equity investments are NOT bad, and they should be a part of (almost) every investor. But to say that investors should forgo every other asset class is just plain foolishness.

I take special offence to these blanket statements:

View attachment 103387

View attachment 103388



Equities give 12%-25% returns? Sure. You know what gives 1200% returns? Crpyto. You know what gives 12000% returns? The ponzi scheme I'm about to launch (for the first 10 people only tho).

Can you guarantee those returns? Absolutely not. And if you rely on these past returns as guaranteed returns and use them to ascertain your future returns, more often that not, you'll end up screwed.

Which is why debt instruments (like FD, EPF, PPF) and other assets like Gold or RE should be an important, nay integral, part of your portfolio.
(Disclaimer: I don't invest PPF or NPS, because I don't like the lock-in period. Instead I invest in something even more conservative for my debt portfolio - liquid funds and FDs).

Please just look at the yield curves of the instruments mentioned. Notice how two are smooth/ almost guaranteed, the equity linked is allover the place.

View attachment 103391

Thought experiment. I have three kids aged 1/ 6/ 16 as of today. I want to save money for their education.

What should I do? Put everything I have in equity?

If I go by the advice given here, the kids aged 1 and 6 (may)be fine.

The kid aged 16 (may)be screwed.

What if the market tanks when he turns 18? The 10 lakh I saved for him is now only worth 6 lakh. Should I just tell him to chill for a year while papa replenishes his education fund?
(PS. If your answer if to move money from Kid aged 1 and 6, just forget it).

Instead, I should have put the 16 YO corpus in a safe debt instrument, split the 6 YOs between equity and debt, and put most of the 1 YOs in equity.

Is this a guaranteed strategy? Absolutely not. But it is a much safer way of investing your hard earned money.

Please, please read up on your own and don't rely on advice from internet strangers (that includes advice by me as well). I can understand trusting people on TE if the question 'What phone to buy' or 'Is a 650W PSU enough for my build?' But when the title of this thread is "What Investment mistakes you made that you want others to avoid?", and my answer to it will be 'Please don't follow the advice of internet strangers, especially on this thread.'

Unlike a PSU or a phone, the quantum involved could be 100x or 1000x.

You can't RMA a bad investment.

You know, I used to think the mods on r/indianinvestments were a bunch of stuck up jerks because of how strict they are wrt to posts on their sub. Now I sympathize with them. Having to moderate hundreds/ thousands of people, who come and post their poor quality advice day after day would be enough to give anyone an ulcer.

I will leave this long post with one final example as to why diversification is not important, if not absolutely necessary.

The Mint Asset Quilt is an annual survey of 10 asset classes, ranging from equity to debt to tangibles (no crpyto here as of yet).

This was the last year's snapshot. Notice the performance of equity vs other asset classes year-on-year. Now imagine if you're invested 100% in equity and need money the very same year equity has tanked.

View attachment 103364


This was discussed on Reddit as well. One user did the CAGR of all asset classes as well. Please note the returns:


Even after adding the dividends as mentioned by one of the comments, equity doesn't outperform other stable assets by a significant margin.


View attachment 103392

If people think investing 100% in equity and nothing everywhere else is still right for them then good luck and may God help you.

This will be my last post on this thread. Good luck to everyone on their investment journey.
The comparison was equity vs fd/gold. Debts/liquid funds are good cushions to guard against bear phases. IIRC withdrawal from liquid funds for upto 50k is instant IMPS, and yes you are right nothing is garenteed.
 
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becool773

Active Member
Disciple
Yes but equities (is the economy in a way) give more returns over fds over time... :)
You are missing on international equities I think.
I reinvest that in some other scheme like bonds
Like?
I understand if something like this happens in India we are doomed!


:(
I told some member in this thread earlier I fear this lost decade. BTW this can come very soon thanks to the current goberment.
You can't RMA a bad investment.
Dope
Bruh, I can't even with this thread anymore.

After the first few pages I had sworn off it, but I keep coming back to it like a fly smelling something. And it doesn't fail to give me a stomach ache every time.

When this thread started, I written that there was some really bad advice being posted.

View attachment 103378

My mistake. I really should have stepped in then and there. Instead, I had hoped some other experienced investors would have stepped in, instead I was lazy.

Sarcasm didn't work either.

View attachment 103390


Third time's the charm.

I'm sorry to be so blunt, especially since most of the bad advice is coming from a mod. I will reiterate and bold this:

Investing in pure equity (doesn't matter if it's directly into stocks or via equity MFs) is not the answer to all your investment decisions!

I will add this to my statement: Equity investments are NOT bad, and they should be a part of (almost) every investor. But to say that investors should forgo every other asset class is just plain foolishness.

I take special offence to these blanket statements:

View attachment 103387

View attachment 103388



Equities give 12%-25% returns? Sure. You know what gives 1200% returns? Crpyto. You know what gives 12000% returns? The ponzi scheme I'm about to launch (for the first 10 people only tho).

Can you guarantee those returns? Absolutely not. And if you rely on these past returns as guaranteed returns and use them to ascertain your future returns, more often that not, you'll end up screwed.

Which is why debt instruments (like FD, EPF, PPF) and other assets like Gold or RE should be an important, nay integral, part of your portfolio.
(Disclaimer: I don't invest PPF or NPS, because I don't like the lock-in period. Instead I invest in something even more conservative for my debt portfolio - liquid funds and FDs).

Please just look at the yield curves of the instruments mentioned. Notice how two are smooth/ almost guaranteed, the equity linked is allover the place.

View attachment 103391

Thought experiment. I have three kids aged 1/ 6/ 16 as of today. I want to save money for their education.

What should I do? Put everything I have in equity?

If I go by the advice given here, the kids aged 1 and 6 (may)be fine.

The kid aged 16 (may)be screwed.

What if the market tanks when he turns 18? The 10 lakh I saved for him is now only worth 6 lakh. Should I just tell him to chill for a year while papa replenishes his education fund?
(PS. If your answer if to move money from Kid aged 1 and 6, just forget it).

Instead, I should have put the 16 YO corpus in a safe debt instrument, split the 6 YOs between equity and debt, and put most of the 1 YOs in equity.

Is this a guaranteed strategy? Absolutely not. But it is a much safer way of investing your hard earned money.

Please, please read up on your own and don't rely on advice from internet strangers (that includes advice by me as well). I can understand trusting people on TE if the question 'What phone to buy' or 'Is a 650W PSU enough for my build?' But when the title of this thread is "What Investment mistakes you made that you want others to avoid?", and my answer to it will be 'Please don't follow the advice of internet strangers, especially on this thread.'

Unlike a PSU or a phone, the quantum involved could be 100x or 1000x.

You can't RMA a bad investment.

You know, I used to think the mods on r/indianinvestments were a bunch of stuck up jerks because of how strict they are wrt to posts on their sub. Now I sympathize with them. Having to moderate hundreds/ thousands of people, who come and post their poor quality advice day after day would be enough to give anyone an ulcer.

I will leave this long post with one final example as to why diversification is not important, if not absolutely necessary.

The Mint Asset Quilt is an annual survey of 10 asset classes, ranging from equity to debt to tangibles (no crpyto here as of yet).

This was the last year's snapshot. Notice the performance of equity vs other asset classes year-on-year. Now imagine if you're invested 100% in equity and need money the very same year equity has tanked.

View attachment 103364


This was discussed on Reddit as well. One user did the CAGR of all asset classes as well. Please note the returns:


Even after adding the dividends as mentioned by one of the comments, equity doesn't outperform other stable assets by a significant margin.


View attachment 103392

If people think investing 100% in equity and nothing everywhere else is still right for them then good luck and may God help you.

This will be my last post on this thread. Good luck to everyone on their investment journey.
What are your views on international stock investing? Need a pov from a senior.
 
Last edited:

letmein

Well-Known Member
Adept
What are your views on international stock investing? Need a pov from a senior.

I don't invest directly in US stocks. I simply don't have the time to research and make individual stock picks - I've got my hands full with tracking and investing in Indian stocks.

I invest in MO Nasdaq 100, MO S&P 500 and Edelweiss China. Together these 3 funds comprise around 25% of my MF portfolio.

Was invested in Franklin US Opportunities but I exited that last year when Motilal launched their S&P 500.
 

booo

BA BA BA BABANANA
Veteran
What are your views on international stock investing? Need a pov from a senior.
us stock market requires a bit more due diligence. thinkgs like not watching cnbc and other financial mainstream media, not trusting “financial analysts” etc... and a lot of discipline.
There are too many people hyping up stocks/crushing down stocks with fake news and over reactions. a lot of opinion shaping and social engineering. example boeing in 2020. amd in 2018 and 19. iqiqi and baba before trade wars. nio right now.

you should not even trust my words i say!!!
 

raksrules

Well-Known Member
Veteran
I don't invest directly in US stocks. I simply don't have the time to research and make individual stock picks - I've got my hands full with tracking and investing in Indian stocks.

I invest in MO Nasdaq 100, MO S&P 500 and Edelweiss China. Together these 3 funds comprise around 25% of my MF portfolio.

Was invested in Franklin US Opportunities but I exited that last year when Motilal launched their S&P 500.

I was investing in both MO S&p 500 and NASDAQ FoF but recently stopped the latter. Should I restart it? Any reason to have both?
 

JMP

Well-Known Member
Adept
I don't invest directly in US stocks. I simply don't have the time to research and make individual stock picks - I've got my hands full with tracking and investing in Indian stocks.

I invest in MO Nasdaq 100, MO S&P 500 and Edelweiss China. Together these 3 funds comprise around 25% of my MF portfolio.

Was invested in Franklin US Opportunities but I exited that last year when Motilal launched their S&P 500.
How has your experience been with Edelweiss Greater China Fund? I find the fund and its performance good but have concerns about the AMC.
 

becool773

Active Member
Disciple
MO Nasdaq 100
https://freefincal.com/motilal-oswal-nasdaq-100-fund-of-fund/ is the tracking error and liquidity issue a turn off for this fund?
us stock market requires a bit more due diligence. thinkgs like not watching cnbc and other financial mainstream media, not trusting “financial analysts” etc... and a lot of discipline.
There are too many people hyping up stocks/crushing down stocks with fake news and over reactions. a lot of opinion shaping and social engineering. example boeing in 2020. amd in 2018 and 19. iqiqi and baba before trade wars. nio right now.

you should not even trust my words i say!!!
True but what about investing in companies like FAANG from a long term perspective?
 

becool773

Active Member
Disciple
Aswath Damodaran talks about lemmings committing mass suicides in his first video
Stuck in some personal work. Can you please explain what is mentioned in that video? If mass suicides due to market fall then don't they happen all over the world if all eggs are in one basket?
What I meat by mentioned FAANG was that they are more trustworthy in terms of growth then all Nifty companies combined.
 

letmein

Well-Known Member
Adept
I was investing in both MO S&p 500 and NASDAQ FoF but recently stopped the latter. Should I restart it? Any reason to have both?
If you're bullish on US Tech companies then go for it. If not, S&P should suffice for international exposure. Also matters how much many MFs you have and your exposure to each. Having 2% of your portfolio in NASDAQ (or any other fund) won't matter. Even if it triples, the overall impact to you would be marginal.

How has your experience been with Edelweiss Greater China Fund? I find the fund and its performance good but have concerns about the AMC.

It's a fund of funds in any case. Edelweiss is not making the investing decisions - they're investing in JPMorgan Greater China Fund.

I think you mentioned earlier that you can bet on FAANG being around 20 years later in the future. My counterpoint will be that 20 years ago, Facebook and Netflix did not exist. Apple was all but written off. There was no guarantee that Google would win against Yahoo or Microsoft in search. So I'll say it's risky. If you're fine with the risk, go for it. I probably sound like an old man, but technology is changing very fast, two years ago no one would have bet that Zoom could have given so much returns and become an office staple. 20 years ago, when I was trying to download pron on an MTNL dial-up connection, I never imagined that I would be able to stream 4k content on Netflix.

PS. One advantage FAANG have is deep pockets, so they can buyout potential competitors that may kill them (eg. Instagram or Orkut).
 

booo

BA BA BA BABANANA
Veteran
What I meat by mentioned FAANG was that they are more trustworthy in terms of growth then all Nifty companies combined.
i am gonna ruffle some feathers here in this thread.

Also when you look into ETFs. there is an “agency cost” associated with them. that is the ETF managers have incentives to push their favorable companies into the etf.
 

VivekSood

WFH FTW!
Staff member
i am gonna ruffle some feathers here in this thread.

Also when you look into ETFs. there is an “agency cost” associated with them. that is the ETF managers have incentives to push their favorable companies into the etf.
That is probably why I have been discouraged to invest IN FAANG. Have to dig more though.


***************************************


Just on time:


:eek:
 
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booo

BA BA BA BABANANA
Veteran
That is probably why I have been discouraged to invest IN FAANG. Have to dig more though.
valuation is actually a fun activity. on average it takes me around six months before i get a conviction and start buying stocks. it starts with Aswath Damodaran’s basics and the later goes into road maps ceo board of directors and company culture etc...

what usually happens is with ETFs is that they become famous after they have already made money. example ARKK. and people will start having “hot hand fallacies” and “confirmation biases”. Vanguard VOO etc are the most secure and successful fund in the modern history but it wont make anyone a lot of money. but its a good entry point until you start doing good valuation and finding stocks.
 

JMP

Well-Known Member
Adept
valuation is actually a fun activity. on average it takes me around six months before i get a conviction and start buying stocks. it starts with Aswath Damodaran’s basics and the later goes into road maps ceo board of directors and company culture etc...

what usually happens is with ETFs is that they become famous after they have already made money. example ARKK. and people will start having “hot hand fallacies” and “confirmation biases”. Vanguard VOO etc are the most secure and successful fund in the modern history but it wont make anyone a lot of money. but its a good entry point until you start doing good valuation and finding stocks.
Asking sincerely, unless one is a full-time investor, does spending this amount of time yield significantly better results than an index?

Could be horribly wrong, but my understanding -
Returns are always proportional to risk. By nature, Mr Damodaran's style of value investing cannot yield disproportionate results. This makes absolute sense if one is into full time investing or in the financial sector. But for others, developing skills and building a business can yield far better results IMO. Looking at how the really rich invest, they have 2 components, consistent compounders and moonshots. Consistent compounders are usually just an index. Moonshots are not based on value but early investments based on probability of success, they yield disproportionate results. This is the best approach I have found so far.
 

VivekSood

WFH FTW!
Staff member
valuation is actually a fun activity. on average it takes me around six months before i get a conviction and start buying stocks. it starts with Aswath Damodaran’s basics and the later goes into road maps ceo board of directors and company culture etc...

what usually happens is with ETFs is that they become famous after they have already made money. example ARKK. and people will start having “hot hand fallacies” and “confirmation biases”. Vanguard VOO etc are the most secure and successful fund in the modern history but it wont make anyone a lot of money. but its a good entry point until you start doing good valuation and finding stocks.
The crux of your post is no-one (at least we the common man) has any clue about upcoming multibaggers and overhyping IPOs ETF or anything is very common since WW2 lol. Only thing different with FAANG is these companies are internet based and the current global scene (covid) is forcing people to buy stuff online (amazon Bezos story) /watch movies/zoom/date online more or less. This reason itself I believe is a good one to invest this FAANG. I don't have any clue about the fees/taxes involved and other hidden sinister ****ups. Will dig more for sure.
 

booo

BA BA BA BABANANA
Veteran
Asking sincerely, unless one is a full-time investor, does spending this amount of time yield significantly better results than an index?
trust me, as a it guy i got shitton of free time at hand. i think everyone has. this is just like spending time on social networking except it makes money. my story, after bag holding tsla for over 3 years through negative numbers it blew up last year. i was like it doesn’t make any sense why it is going down to it doesn’t make any sense why it’s going up. also my first gold mine was not tsla but amd from 9usd. but i didn’t have patience to ride the run. did mistakes like stop loss etc...
my tsmc went up by 100% in just over 6 months. so yeah. definitely more than index funds.
 

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