Subhav Samarth

We hear and read a lot that the stock market is a dangerous place. People lose their entire savings in the market. Staying away from the stock market is better etc. A lot of fear-mongering is done regarding the stock market.  But how exactly is the money lost in the stock market even if we plan to stay invested for a long duration? Let us understand in detail. There are 3 major ways (apart from trading) by which money is lost in the stock market.  1) Investing money in penny stocks: Penny stocks are the companies/stocks which do not have any real market value and are available at a very cheap price in the market. People buy these stocks in the HOPE that it might grow a lot in the future and it will give them good returns. Suppose you have 1000 rs and someone told you to buy ABC stock which is available at 10 rs per share. So, in 1000 rs, you can buy 100 shares. You will have 100 shares and you will hope that in the future if this company grows and its share price reaches 500 r...

Let us now understand in detail mutual funds, one of the finest and easiest financial products available in the market.  Mutual Funds are a financial product that is available for people who want to invest in different types of investment options but do not have the time or expertise to choose good company stocks by themselves. As mentioned in an earlier blog (read understanding the basics of the stock market), a Mutual fund is a wonderful thing. Suppose you and your 4 friends want to invest 1000 rs each in the stock market, but you are all not sure which share to buy for profit. So you all go to a person in your city who is an expert in the stock market. He tells give me your money and I will invest your money in stocks as per my expertise and all profits will go to you 5 people. He will just be investing on your behalf. So he takes your money and invests in the stock market on your behalf. This is what a mutual fund is. A Mutual fund is basically when a lot of people give their ...