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

deusExMachina

Disciple
Look up the term xirr and then use those links to calculate yours.

How do you correlate the XIRR value to simple/compound interest?

You could put in the investment dates, investment amount and the final amount on maturity and get an XIRR from the formula. My question is what does that percent value represent? is it the simple interest on an FD where you invest in a similar pattern? is it the compound interest on a FD where you invest the whole maturity amount as a lumpsum?

I do not yet understand how to compare the XIRR computed percentage against a regular investment instrument like FD (for simplicity).
trust me, as a it guy i got shitton of free time at hand.
Off topic, but how? overstaffed? low activity? I'm just curious
 
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My question is what does that percent value represent? is it the simple interest on an FD where you invest in a similar pattern? is it the compound interest on a FD where you invest the whole maturity amount as a lumpsum?
XIRR=Compound Interest, if lumpsum is made, I am saying this so that you are not confused. But if it is SIP's then you have no choice but to go the XIRR route. Stick with XIRR even for your FD's.


@Everyone
A question for all, say someone missed to invest in the fall of March'20 due to ignorance, lack of knowledge etc. Now he/she has seen say RIL @ 800 something. How can that person make up his mind to invest in RIL at @ 2500 now? RIL is just an example.
 

Rockfella

Nitrate killer!
Staff member
Patron
XIRR=Compound Interest, if lumpsum is made, I am saying this so that you are not confused. But if it is SIP's then you have no choice but to go the XIRR route. Stick with XIRR even for your FD's.


@Everyone
A question for all, say someone missed to invest in the fall of March'20 due to ignorance, lack of knowledge etc. Now he/she has seen say RIL @ 800 something. How can that person make up his mind to invest in RIL at @ 2500 now? RIL is just an example.
Is to start SIPs/investing again. Noone can predict the market. What has gone has gone.
 

raksrules

Elite
XIRR=Compound Interest, if lumpsum is made, I am saying this so that you are not confused. But if it is SIP's then you have no choice but to go the XIRR route. Stick with XIRR even for your FD's.


@Everyone
A question for all, say someone missed to invest in the fall of March'20 due to ignorance, lack of knowledge etc. Now he/she has seen say RIL @ 800 something. How can that person make up his mind to invest in RIL at @ 2500 now? RIL is just an example.

For your second question, I understand the regret but no one can time market so best option is just invest whenever you can especially if you are a long term investor.
 

rdst_1

Skilled
I was talking about direct equities. No SIP's in that. Or were you referring to mutual funds here? You are right btw. What has gone has gone.
I am in the same boat man. I made a little bit day-trading in May 2020, but soon realized it's not for me and thought about investing lump-sum in the Nifty index. At that point market jumped from 8100 to 8900 and I thought that maybe I should wait for it to go down again. I am still waiting.
If you don't want to invest via a MF, you can do your own SIP by buying shares of the index for a fixed amount every month.
 

Etype

Recruit
@Everyone
A question for all, say someone missed to invest in the fall of March'20 due to ignorance, lack of knowledge etc. Now he/she has seen say RIL @ 800 something. How can that person make up his mind to invest in RIL at @ 2500 now? RIL is just an example.
tame down your expectations first thing. Ril is not going back to 800. March20 like black swan events occur only once or twice a decade. Now look for triggers. For example, reliance recently moved up several hundred points due to expected tariff hike and launch of jio 5g phones. It had corrected somewhat due to delay in 5g phone rollout. triggers these days for RIL are aramco deal, phone rollout, tariff hike, retail. any major positive or negative development on these will move the share accordingly. And dont trust the experts blindly. They are commentators actually. Also keep an eye on the bond yields and liquidity pumped by central banks across the world.
 

Rockfella

Nitrate killer!
Staff member
Patron
For your second question, I understand the regret but no one can time market so best option is just invest whenever you can especially if you are a long term investor.
Yes.
I was talking about direct equities. No SIP's in that. Or were you referring to mutual funds here? You are right btw. What has gone has gone.
I meant taking advantage of the Covid situation. Equities or mfs.
I am in the same boat man. I made a little bit day-trading in May 2020, but soon realized it's not for me and thought about investing lump-sum in the Nifty index. At that point market jumped from 8100 to 8900 and I thought that maybe I should wait for it to go down again. I am still waiting.
If you don't want to invest via a MF, you can do your own SIP by buying shares of the index for a fixed amount every month.
This is the reason why SIPs is best for us. No calculation/waiting/analysis needed. Set it and monitor it for some time. When I started I had 7 years time in mind. No get rich quick type of thing.
IMO trading/intra day needs 101% focus and dangerous learning curves. Another thing is let's say you have some cash today .. 2 lakhs and you do a lumpsum and you are lucky and you double it up in short time you will be at a profit of 2 lakhs (this is a very very good hypothetical scenario). 4 lakhs won't change your life but small sips over time (years/decades) has the potential to be a game/life changer as you don't need huge amounts to do big lumpsums. This is why SIPs are best for most of us. Just to add : SIPs are very tweakable. Depending on the mutual fund SIPs can be paused/stopped etc. I have done it many times. When I expect heavy expenses I pause a few for 1 month. Once I got used to it it became very easy for me. We can do lumpsum transactions in the same mf with active sips as well. Except a few funds almost all funds have option to SIP and do occasional lumpies as well.
 
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Etype

Recruit
Thanks. Please explain this. I am so eager to learn about this.
Long back when capitalism made appearance it was driven by adam smiths free market theory. Which advocates market and economy left to the market players and ‘supply and demand’, with minimum or no interference from the government. But when the shit jumps off the floor and hits the roof like it did during the great depression of 1930s, It takes the shit a really long time to return to the floor on the market forces accord. which usually means 10-15 years of job losses and economy in shambles. It is like a generation lost.

So these days, when a black swan event happens, central banks step in with massive massive liquidity to reduce those 15 years to 12-24 months and normalize the economy asap.
It happened during the housing crisis of 2007 too with govt bailouts and liquidity support through near zero interest rate by US Fed.

The US Fed, besides keeping interest rates near zero, has been pumping in 120 billion dollars every month since march2020. Add to that, the money pumped in by ECB, bank of japan, bank of England, and others.
All this money goes to big institutions and eventually finds its way to the share market and other instruments. This is the reason why the markets have been going up and up. And lot of people just kept waiting for a fall.

In the short term, this liquidity makes the rich richer, and the poor suffer. But the economy and jobs get saved, and govts got no better alternative. No wonder elon must is worth 200bn and even crypto..

Anyway, the party might be near its end. Talks are already on about tapering (reducing that ‘120bn a month‘ gradually) and then increasing interest rates to start sucking out liquIdity somewhat. Tapering is expected dec or even from nov if covid keeps withering away and us job growth data is promising.

Regarding bond yields my knowledge is very elementary.
when Fed hikes interest rates some investors pull out money from shares and move into bonds. Also, When US inflation starts to go out of comfort zone, investors read it as more likelihood of rate hike. And bond yields go up in anticipation. And when bond yields go alarmingly high share market panics.

tapering has been more or less factored in. Markets might react on any comments by Fed on nov 4, that indicate earlier than expected rate hikes.
Anyway, will nifty go back to 14k or 15k? not likely.
what you all think?
 

Rockfella

Nitrate killer!
Staff member
Patron
Long back when capitalism made appearance it was driven by adam smiths free market theory. Which advocates market and economy left to the market players and ‘supply and demand’, with minimum or no interference from the government. But when the shit jumps off the floor and hits the roof like it did during the great depression of 1930s, It takes the shit a really long time to return to the floor on the market forces accord. which usually means 10-15 years of job losses and economy in shambles. It is like a generation lost.

So these days, when a black swan event happens, central banks step in with massive massive liquidity to reduce those 15 years to 12-24 months and normalize the economy asap.
It happened during the housing crisis of 2007 too with govt bailouts and liquidity support through near zero interest rate by US Fed.

The US Fed, besides keeping interest rates near zero, has been pumping in 120 billion dollars every month since march2020. Add to that, the money pumped in by ECB, bank of japan, bank of England, and others.
All this money goes to big institutions and eventually finds its way to the share market and other instruments. This is the reason why the markets have been going up and up. And lot of people just kept waiting for a fall.

In the short term, this liquidity makes the rich richer, and the poor suffer. But the economy and jobs get saved, and govts got no better alternative. No wonder elon must is worth 200bn and even crypto..

Anyway, the party might be near its end. Talks are already on about tapering (reducing that ‘120bn a month‘ gradually) and then increasing interest rates to start sucking out liquIdity somewhat. Tapering is expected dec or even from nov if covid keeps withering away and us job growth data is promising.

Regarding bond yields my knowledge is very elementary.
when Fed hikes interest rates some investors pull out money from shares and move into bonds. Also, When US inflation starts to go out of comfort zone, investors read it as more likelihood of rate hike. And bond yields go up in anticipation. And when bond yields go alarmingly high share market panics.

tapering has been more or less factored in. Markets might react on any comments by Fed on nov 4, that indicate earlier than expected rate hikes.
Anyway, will nifty go back to 14k or 15k? not likely.
what you all think?
Great info. I know a bunch who have been waiting for a fall since mar20. Even if a somewhat small fall happens we get better NAVs for future sips/investments. It is a win-win for investors as this is the best quadrant to be in:

4.jpg
 

Mr.J

Skilled
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