False propaganda is being spread through websites, SMSes and social media such as Facebook and WhatsApp. Investors need to take some precautions to avoid losing money as victims of such scams.

The first is to invest only in companies that are consistently trading at a high volume and have sufficient market value. Analysts and broking companies do not conduct research and studies on very small companies. Therefore, accurate and transparent information about such companies may not be available.

Investors should be aware that if anyone predicts that a stock will make a big leap in the coming days based on credible news, it is a ploy to artificially inflate the share price. Only after doing some research on your own should you decide to buy shares of unknown companies. Such stocks should be excluded if there are no reports from reliable and authoritative sources about the basic quality of the company. Brokerages and research houses often recommend non-standard stocks that are not even within the scope of their study, via SMS and the like.

Such fraudsters take advantage of the fact that ordinary small investors are ignorant of the analytical methods to be adopted when buying shares. The stocks they recommend are often lower priced. Many investors have the misconception that low-cost stocks will pay dividends. Most investors are confused about the difference between the price and value of a stock.

Inexpensive stocks do not have to be cheap, and expensive stocks do not have to be overvalued. Small investors often buy stocks under the misconception that the value of cheap stocks is low.

The value of a share should be determined based on various valuation methods such as the ratio between share price and earnings per share, the ratio between share price and book value. Many factors such as the financial position of the companies, the governance of the company, the quality of management and transparency in operations need to be considered before making an investment decision. Investors should avoid buying shares of companies for short-term gain when there is ambiguity about such matters.

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The ‘Satellite Portfolio’ is designed to generate short-term gains from the stock and commodity markets. Normally, the investment period of such a portfolio is three to six months. Thereafter, investors can follow the method of selling at a profit and reinvesting when the opportunity arises.

Satellite portfolios are designed so that our long-term goals do not affect our financial planning if the long-term portfolio does not achieve the intended results. The Satellite Portfolio is designed to capitalise on market volatility in the short term.

Investors would also be happy to see short-term gains in stocks. But investors need to be prepared to trade in this way.

Technical analysis is required to identify business opportunities. For this you need to learn to analyse technical charts. Professional research reports can be relied upon until you develop the ability to study technical analysis. At the same time, learning and trading technical analysis on your own can be more enjoyable than trading based on other people’s reports.

Special attention should be paid to select fundamentals by studying fundamental analysis along with technical analysis. When there is a strong technical correction in the best stocks, it should be used as an investment opportunity. The investor should also be prepared to wait for a reasonable return on the short-term investment.

Satellite portfolio should not exceed 40 per cent of total investment. For example, if your total portfolio is Rs.50 lakhs, at least Rs.30 lakhs should be set aside for a long-term portfolio with objectives in mind. A maximum of Rs.20 lakhs can be spent on a satellite portfolio. This type of investment arrangement is made to ensure that you are investing for the short term without sacrificing your goals.

When the value of the satellite portfolio exceeds 40 per cent, care should be taken to invest the profit in a bank depot or liquid fund. This will help you increase the value of your long-term portfolio ahead of your goals.

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Most people would like to seek the help of an adviser for investment planning. Portfolios managed by advisers offer better performance than self-managed portfolios. But if you only include fixed deposits and index funds in your portfolio, an advisor has nothing to do with maximizing returns. But he can do something else. It is to train your nature.

Such a service will help you make the right investment decisions and avoid making decisions that could affect your financial health. The important thing is to make the right decisions that affect the profit and loss of the portfolio. You can also seek the help of an advisor.

Under what circumstances can an adviser help you make decisions? For example, suppose you and your spouse have different opinions on how to invest. In such a case the help of an adviser can be sought to avoid a dispute. The advice of an advisor can help keep financial matters from affecting your personal relationships.

An adviser can also avoid making decisions based on quick impressions. If you feel compelled to buy or sell shares or equity fund units when the market falls or rises by 10 per cent, you should seek the advice of an adviser before making a decision. There can sometimes be a feeling of making a profit based on the feeling that the stock market is falling. But is it right to withdraw the investment now if it has been made for the educational needs of the children years later? When such questions arise on their own, they can be discussed with the adviser.

Some people have a tendency to procrastinate. Those who procrastinate their investment may decide on the basis of the advice of an adviser whether it is the right course of action.

Controlling emotions is not always possible for many as an investor. You may not have the intention of making an immediate profit while investing. But when you start making a profit, you may be tempted to make a profit immediately, fearing that it will be lost. In such cases you can seek the help of an adviser.

The services of a professional may not always be available in decision making. In such cases, you can seek the advice of your spouse or friend. Decisions can be made through discussion based on certain pre-determined rules.

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Consumers need to ask themselves the question of how safe it is to buy gold as the digital gold market (digital gold market) grows in India. The lack of a regulatory authority is likely to affect the transparency of the digital gold market.

Digital gold is gold that is bought online and stored in online accounts through various platforms such as Paytm and Google Pay. Companies such as Augmont, Motilal Oswal and PhonePay also provide this service.

It is estimated that between eight and nine tonnes of gold are sold annually through these platforms. Approximately three tons of gold reach the account holders’ homes each year as part of this transaction. Sales of gold jewellery and coins online are on the rise.

Companies that sell gold online offer free storage services. These companies also facilitate the conversion of gold in a digital account into jewellery. For example, Digital Gold India provides digital gold purchasing services through Carat Lane and Candere, a subsidiary of Kalyan Jewelers.

MMTC-PAMP distributes and stores gold sold by online wallets such as Paytm, Google Pay and PhonePay. Augmont is another leading gold distribution company. Augmont has its own gold refinery. Augmont Gold sells in collaboration with various e-commerce companies and wallets.

Consumers want to buy digital gold because they can avoid the security problem of holding gold in physical form. Buying gold digitally is less expensive than buying it in physical form. As it is stored digitally, gold can be sold and converted into physical form at any time through an online account. Proceeds from the sale of gold through e-wallets will be credited to the e-wallet account.

As soon as a customer buys gold digitally, the equivalent physical amount of gold is credited to his account. The guarantee is given by the trustee of the company. But this does not always have to be the case.

These firms deal with gold transactions under the Shop & Establishment Act. Who will the customer approach if such institutions fail to pay for the purchased gold? These companies do not operate under the control of any regulatory authority.

There are no legal restrictions on gold demat accounts. There is currently no system in place to investigate illegal transactions in these accounts.
The only way to secure such transactions is to handle digital gold accounts through Depository Participants. Digital Gold accounts will be safer if the government’s move to open depository accounts and start holding gold through them becomes a reality.

Sovereign gold bonds, gold ETFs and gold savings funds are currently safer than digital gold accounts. Concerns about the safety of gold do not apply to bonds and ETFs. Sovereign gold bonds are issued by the Reserve Bank. You can also invest in gold bonds in demat form. Investors have the opportunity to buy these at the time of sale of Reserve Bank bonds. These bonds are listed on the stock exchanges so there is an opportunity to buy them online. Gold ETFs provide the facility to deposit gold in demat form.

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There is a high risk in equity investment. This is what drives many people to sell out when they make a small profit. Occasional buying and selling of portfolio stocks to manage risk may defeat the goal of long-term investment success.

Deciding to sell a stock based solely on the purchase price is a wrong approach. Just because you got good returns, you need not sells off a share. If the company is on the right track, the graph of the stock will be up. Profitability should only be considered if there are adverse factors affecting the growth of the company. Shares of a company that is growing in the right direction will continue to perform well. Short-term profiteers should conduct such trades on the basis of technical analysis.

The investor needs to evaluate the factors that adversely affect a company and how an event or problem may affect the company. If you are approaching the stock market not just to do ‘intra day’ trades, you need to do some minimal research and include the long term potential of equity investment.

If you are thinking about making a profit based on the purchase price of the stock, you need to examine if the stock is currently expensive. The decision should be based on criteria such as share price and earnings per share. The ratio between the share price and the earnings per share should be compared with the current average and the current ratio – to determine whether the stock is expensive.

Ordinary investors often choose stocks based on their price. Investors who are interested in buying cheaper stocks often do not check why the price has dropped or how much the company’s management is maintaining quality. The value of a stock is something that should be considered only after realising these three factors of a company: whether the business, financial position and management are excellent. It is not the right way to invest just because the first three factors are not sound and the cost is low.

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Financial planners need to have basic financial knowledge. This will help in adjusting the investment in different periods and selecting different asset sectors according to the risk readiness. But in addition to all this, another knowledge is needed. That is the knowledge of self.

One’s nature is a factor that affects one’s investment style and choice of assets. Individuals react differently to each situation according to their nature. Some may be emotionally devastated by adverse circumstances. But there are others who are eager to deal with such situations with balance. There is also a difference in terms of investment.

Warren Buffett, a guru of investors, is famous for saying, “Fear when others are hungry, and be greedy when others are afraid.” But how many people show this attitude? How many people take advantage of the opportunities that come with a sharp fall in investing avenues such as the stock market? Most people are worried about the loss. Those who seize the opportunity to take advantage of the occasional opportunity will always be in a minority. Anxiety eliminates the possibility of better gain. This is how the nature of individuals influences investment.

Understanding yourself is the key to success in investing. You can understand the your nature as an investor through the three questions of what, how and when.

By asking yourself what you do as an investor, or what investment products and services you own, you can identify where you stand as an investor. If you are a person with only provident fund and a few savings as investment then you need to understand that you need to go a long way in financial planning. If your total wealth is a portfolio that has lost a lot of non-standard stocks, then you need to realise that you are taking unnecessary risks.

The next question is how do you invest. If your investment is systematic through means such as the Systematic Investment Plan (SIP), you will know that you have a basic plan. If the money is invested together in any asset sector, then there is a flaw in the planning.

The question of why you are investing can help you understand your goals. If your investment is not related to goals then the realisation of life goals may not happen in a timely manner.

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