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Tag Archive: passive investing


The single greatest mistake investors make is to extrapolate recent history out into the future. They take the financial blogreturns of the past 5 days or 5 years or even 50 years and assume the next few days or years will look just the same without any consideration for the historical context or conditions that provided for those returns.

They forget that, while ‘history may rhyme, it doesn’t repeat itself’ (Twain). Or that, “the only thing that is constant is change” (Heraclitus). These two famous quotes apply to the financial markets as much as anything.

Ignoring these truths and instead simply extrapolating is why investors are suckered into pouring money into the stock market only after a run of great performance. They believe that the recent gains are about to repeat to their great benefit when they should be thinking about what conditions allowed for those gains to take place and analyzing whether they are still relevant or not. Continue reading

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The single greatest mistake investors make is to extrapolate recent history out into the future. They take the financialblog returns of the past 5 days or 5 years or even 50 years and assume the next few days or years will look just the same without any consideration for the historical context or conditions that provided for those returns.

They forget that, while ‘history may rhyme, it doesn’t repeat itself’ (Twain). Or that, “the only thing that is constant is change” (Heraclitus). These two famous quotes apply to the financial markets as much as anything.

Ignoring these truths and instead simply extrapolating is why investors are suckered into pouring money into the stock market only after a run of great performance. Continue reading

You are neither right nor wrong because the crowd disagrees with you. You are right because your data and blogreasoning are right. In the world of securities, courage becomes the supreme virtue after adequate knowledge and a tested judgment are at hand. -Ben Graham

There are plenty of folks out there that want you to believe that there’s only one way to make money in the markets (and they’re only too happy to show you how). This is just not true. I truly believe that there are as many ways to make money in the markets as there are unique human beings on the planet.

One thing I hear more and more, especially on social media, is that when it comes to investing, “one size fits all.” Continue reading

I don’t mine repeating myself several times, unless you are helping someone to explain things. This is the post for my junior blogcolleagues and for my team trying to dig for basics of Mutual fund , Asset management  company , selection of funds and comparison of scheme with others.

So friends, A mutual fund is a trust that pools the money of several investors and manages investments on their behalf. Legally it is like any other company you know of. Hence, the fund is also called a mutual fund company. The fund company takes your money and like you from other new investors. This is added to the money that’s already invested with the fund.
Asset management company (AMC) – Investing and managing the collected money is a difficult task. The fund company delegates this to a company of professional investors, usually experts who are known for smart stock picks. This company is the Asset Management Company (AMC) and the fund company usually delegates the job of investment management for a fee. Continue reading

Investing in the stock market is a bit counter-intuitive. It would seem that the investor that puts in more time and effort managing bloghis investments should have an edge over other investors. However, this extra effort actually can create serious problems. A more hands-off strategy typically works out better for most investors. This is the power of passive investing.

Active vs. Passive Investing

An active investor is trying to get above average market returns by constantly buying and selling stocks. He hopes to find the most profitable stocks on the market through research and market timing. The problem with this is that only half of investors in the stock market can be above average each year. If your picks go wrong, you can earn less than the average return of the market. Continue reading

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