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Date:02/12/2006 URL: http://www.thehindu.com/thehindu/mp/2006/12/02/stories/2006120201570100.htm Back Metro Plus Bangalore Chennai Coimbatore Delhi Hyderabad Kochi Madurai Mangalore Tiruchirapalli Thiruvananthapuram Vijayawada Visakhapatnam Puducherry

A share in the pie
Easy access to information and high net incomes have given youngsters the confidence to explore the stock market, writes K. JESHI
PHOTO: K. ANANTHAN

WORK HARD: INVEST SMARTER With a sensible financial plan The investing adage — You can only get poor in a hurry; getting rich takes time — has found serious takers in the growing number of the young salaried individuals. Their buzzwords are `Invest well' and `Allow your investments to grow'. Software professionals, BPO employees, doctors, housewives, bankers, engineers and businessmen are now keeping aside a sizeable chunk of their disposable income to buy shares and gain long-term financial benefits. "Easy access to information and the availability of professional help are turning salaried youngsters into part-time investors in shares. They invest anywhere between 20 and 30 per cent of their monthly income because the return is pretty high," says Jose. C. Abraham, Managing Director, Fortune Wealth Management Company, a trading member of NSE.

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Follow a blueprint A Systematic Investment Plan is the key to get started. "Buying a share is equivalent to sharing a bit of the company's ownership. By investing a substantial amount every month in a top rated share and by building a good portfolio, your investment grows. Opt for a sector that is doing well. At present, along with the IT boom, segments like engineering infrastructure, telecom, logistics, retailing, capital goods, real estate, banking and power have also taken off in a big way. Investing in the leader in such segments is a great way to cash in," José explains. While sticking to a game plan is important, understanding market trends and the financial position of companies also matters. As technical advisor R. Ramya starts talking about the indicators and charts that help her track the movement of shares, she is flooded with calls seeking guidance on shares. Limit the losses "We get close to 30 calls a day. The minute-by-minute update of the volume of shares helps guide investors. Some of them go in for intra-day trading (buying and selling for immediate gains). Options like `stop-loss' (you buy a share at Rs. 100 and fix stop-loss at Rs. 95) limits the risk quotient," she adds. When you start investing early, there is enough time to maximise long-term returns. N. Dhinakaran, a Master of Foreign Trade student and an investor, says youngsters begin with small amounts like Rs.10,000 and increase it on seeing gains. "When the market is up, one can be sure of 40 per cent return in 12 months. Paying attention to market trends is important to keep track of your money. For instance, sugar prices have come down in the international market; so be wary of parking money there," he adds. Look up the track record of the company, advises engineer-turned investor S. S. K. Thirukumar. "Study a company's financial performance in the past decade, its projections, Earnings Per Share and Profit Earnings Ratio and get an update on its current financial status," he adds. Patience pays Investor N. Ganesh agrees. "There is no gain without pain. The markets can move up, down or sway sideways — the risk factor is always there. So, you need to wait and watch to gain realistic profits. But the liquidity is great — you can dispose it of almost immediately. This way, you have complete control over your money," he adds. To stay tuned with market developments, investors also go online. "Articles on industry trends in business magazines written by experts help in decision-making too," says housewife S. Rani, who trades short-term shares in banks and also invests in blue chip

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companies for long-term benefits. Keep a watch "Trends can reverse anytime; so it is better to approach a professional for your portfolio management. Ten profits can get wiped out in one loss," she cautions. S. K. Radhakrishnan, Regional Manager of Geojit Financial Services, says that in the last five years people have moved on from traditional saving options to shares. "We also conduct an Investor Education Programme for college students and corporate houses to guide them on full and part-time investment in shares," he adds. Changing mindset This trend is partly due to the shift in the thought process of youngsters, says V. S. Pradeep, Vice-President (sales and marketing) of Finerva Solutions Private Limited, which helps youngsters learn the basics of personal finance management. "So far, parents managed the finances of youngsters. Now, youngsters have placed this trust in professionals," he adds. With players in the IT segment coming up with ESOPs and IPOs, employees have realised that they can also have a piece of the share market pie. "There is no longer any `fear' associated with shares, as people are more aware and also have huge sums of money at their disposal. So, they are willing to take risks and handle the ups and downs in the market sensibly. Another motivating factor is the growing number of youngsters turning full-time investors. It boosts the confidence level of those wanting to become part-time investors," he adds. © Copyright 2000 - 2008 The Hindu

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