Case Study - Stock Market or Mutualfunds

Recently, I met my friend who owns a traditional business outlet(retail & wholesale), recently he took out all the money from him stocks portfolio with a small loss and invested in his wholesale business to increase turnover, which gives him 5-12% returns.

Last year around same time, I had met him, he was very optimistic and bullish on his stocks portfolio as he was seating on 25% profits overall with few stocks giving him more than absolute 60% returns. And he was planning to gradually close his business and shift his 100% focus to stock market trading.

And now he concludes, that stock market is not his forte, rather Mutual Fund & SIP is great means of saving regular money for future financial goals with peace of mind, expect goods returns with indexation & compounding gains, if hold for long term. (for your information, I must second and agree above views, because he is good at his traditional business and he should focus on one it religiously) 

What we can learn from above example, is psychology, circumstances and sentiments influences human behavior and decisions.

Out of my personal experience, I can say nor business or stock market options are bad, its about your financial goals, knowledge, interest and experience matters. You will have to gain knowledge about the subject, then gradually apply the strategies and techniques and track regularly to book periodic interval profits or losses.

Remember #profit and #loss is part of game. It is all about your objective and risk planning.

Parimal Shah

Business Partner - Financial Products

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