Index

* Investing 5w's &1 H

* Equity

* Fixed Deposit

* Gold

* Real Estate

* Comparative Analysis in terms of return ( Eq/FD/Gold)

* Conclusion

Q&A

INVESTOR PSHYCOLOGY FOR TRADING INSTRUMENTS

Investing!!! 5W's and 1H

"How"to invest?- “How”- We all know how to invest, as we all have invested something for a better some thing.The point is, if you really think about it, you do a lot of investing, all the time. Maybe not in stocks but in life itself.

“When”The old Wall Street saying that you have heard forever: buy low, sell high. Bingo. That's exactly what you would do for anything else. Buy something for a low price, cheap, on discount, get your value from it, and sell it at a profit.

“Who”- Every individual who intends to make money should invest

“Why”- Investing is a way to grow money and for a secure future

“ What”- N number of investing alternatives are there like commodities, stocks, antiques, SIP etc

Equity:-

Equity is an investment avenue which is able to offer the highest possible returns but is very risky as there are huge probabilities of investors even losing some part of the invested capital too

Why?? a)They provide the highest potential returns

b)Stocks can give multiple returns on investment that no other asset class can match

c) Alternative options galore

d)dividend stocks for long term and enjoy the dividends

Fixed Deposits:-

Fixed deposits are a high-interest-yielding Term deposit and offered by banks in India. The most popular form of Term deposits is Fixed Deposits, while other forms of term Deposits are Recurring Deposit and Flexi Fixed Deposits (the later is actually a combination of Demand deposit and Fixed deposit).

Why???a) Safety

b) Regular Income

c) Saves Tax

Gold:-

There are a number of distinctive qualities that separate gold from the rest of the c commodities complex, such as its role in central banks reserve asset management and the outstanding physical and chemical properties that make it ideal for use in technological application.

Why???a) long-term store of value b)Gold has historically been an excellent hedge against inflation

c)Unlike paper currency, coins or other assets, gold has maintained its value throughout the ages.

Real Estate investment trust

A security that sells like a stock on the major exchanges and invests in real estate directly, either through properties or mortgages. REITs receive special tax considerations and typically offer investors high yields, as well as a highly liquid method of investing in real estate.

Why??? a)It’s safe (as houses)

b)It’s easy to get started

c)It’s easier to research than stocks and shares

d)Different strokes for different folks

YEAR FD RATE

FD VALUE SENSEX

SENSEX RETURNS

SENSEX VALUE

GOLD GOLD RETURNS

GOLD VALUE

10000.00 129 10000 1159 10000

1980-81 7.50% 10750.00 173 34% 13411 1522 31% 13132

1981-82 8.00% 11610.00 218 26% 16899 1719 13% 14832

1982-83 8.00% 12538.80 212 -3% 16434 1723 0% 14866

1983-84 8.00% 13541.90 245 16% 18992 1858 8% 16031

1984-85 8.00% 14625.26 354 44% 27442 1984 7% 17118

1985-86 8.50% 15868.40 574 62% 44496 2125 7% 18335

1986-87 8.50% 17217.22 510 -11% 39535 2323 9% 20043

1987-88 9.00% 18766.77 398 -22% 30853 3082 33% 26592

1988-89 9.00% 20455.78 714 79% 55349 3175 3% 27394

1989-90 9.00% 22296.80 781 9% 60543 3229 2% 27860

FOR 1ST DECACDE

IF SOME ONE HAS INVESTED 10,000 IN 1980 IN 3 DIFFRENT ALTERNATIVES

IN 1990THE RETURNS ON FD ON AVERAGE OF 8.35% AMOUNT WILL BE 22300

THE RETURNS ON SENSEX ON AVERAGE OF 24% AMOUNT WILL BE 60500

THE RETURNS ON GOLD ON AVERAGE OF 9% AMOUNT WILL BE 27860

YEAR FD RATE

FD VALUE

SENSEX

SENSEX RETURNS

SENSEX VALUE

GOLD GOLD RETURNS

GOLD VALUE

10000.00 781 10000 3229 10000

1990-91 9.00% 10900.00 1168 50% 14955 3452 7% 10691

1991-92 12.00% 12208.00 4285 267% 54866 4298 25% 13311

1992-93 11.00% 13550.88 2281 -47% 29206 4104 -5% 12710

1993-94 10.00% 14905.97 3779 66% 48387 4532 10% 14035

1994-95 11.00% 16545.62 3261 -14% 41754 4667 3% 14453

1995-96 12.00% 18531.10 3367 3% 43111 4958 6% 15355

1996-97 11.00% 20569.52 3361 0% 43035 5071 2% 15705

1997-98 10.50% 22729.32 3893 16% 49846 4347 -14% 13462

1998-99 9.00% 24774.96 3740 -4% 47887 4268 -2% 13218

1999-2000 8.50% 26880.83 5001 34% 64033 4394 3% 13608

FOR 2ND DECACDE

IF SOME ONE HAS INVESTED 10,000 IN 1990 IN 3 DIFFRENT ALTERNATIVES

IN 1990THE RETURNS ON FD ON AVERAGE OF 10.40% AMOUNT WILL BE 22300

THE RETURNS ON SENSEX ON AVERAGE OF 37% AMOUNT WILL BE 64033

THE RETURNS ON GOLD ON AVERAGE OF 4% AMOUNT WILL BE13600

YEAR FD RATE

FD VALUE

SENSEX SENSEX RETURNS

SENSEX VALUE

GOLD GOLD RETURNS

GOLD VALUE

10000.00 5001 10000 4394 10000

2000-01 8.50% 10850.00 3604 -28% 7207 4474 2% 10182

2001-02 7.50% 11663.75 3469 -4% 6937 4579 2% 10421

2002-03 4.25% 12159.46 3049 -12% 6097 5332 16% 12135

2003-04 4.00% 12645.84 5591 83% 11180 5719 7% 13015

2004-05 5.25% 13309.74 6493 16% 12983 6145 7% 13985

2005-06 6.00% 14108.33 11280 74% 22555 6901 12% 15706

2006-07 6.60% 15039.48 13072 16% 26139 9240 34% 21029

2007-08 4.67% 15741.82 15644 20% 31282 9996 8% 22749

2008-09 8.06% 17010.61 9708 -38% 19412 12890 29% 29335

2009-10 3.81% 17658.72 17527 81% 35047 15766 22% 35881

FOR 3R DECACDE

IF SOME ONE HAS INVESTED 10,000 IN 2000 IN 3 DIFFRENT ALTERNATIVES

IN 2010THE RETURNS ON FD ON AVERAGE OF 5.86% AMOUNT WILL BE 17650

THE RETURNS ON SENSEX ON AVERAGE OF 21% AMOUNT WILL BE 35047

THE RETURNS ON GOLD ON AVERAGE OF 14% AMOUNT WILL BE 35880

1981-1990 1991-2000 2001-2010 2011-20140.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

35.00%

40.00%

8.35%

10.40%

5.86%

8.88%

24.00%

37.00%

21.00%

7.00%9.00%

4.00%

14.00%

17.00%

FD RATE

SENSX RETURNS

GOLD RETURNS

Going through the chart & overall calculations ,if equal investment of 10000 is considered in all the three alternatives of investment, the return in the previous years was maximum in sensex, then in Gold and was least in FDAs per the analysis, sensex can be ranked as top most investment alternative, than Gold and lastly FD. Along with the above fact and figures the major support goes with the sensex ( equities) as it is less risk associated and due time dividends can also be minted.Where as on comparing Gold & FD's although return wise Gold is strong but at the same time highly volatile and risk is there. While with the fixed deposits the risk associated is nill and the returns are well assured.