Almost every investor, including you and I, has done this at least once during his investment lifetime. We have acted on a tip or a rumour, or simply taken a speculative gamble. Most small investors have invariably lost their shirts, incurred huge losses, or made several wrong decisions. This is true not just about stock markets, but also about other investments, be it insurance, pension, real estate, or bullion. Therefore, when we thought of launching Money Today nearly two years ago, we were clear that the magazine’s first job would be to “educate” investors. Almost all our articles, features and columns have adhered to this commandment.
One of our regular sections is Model Portfolios, where we take stock-related decisions according to what we feel is likely to happen in the markets, and try to ride the bullish or bearish waves. In a sense, we are not just acting as a strong bridge between experts and readers, but we are the experts and are talking directly to readers. The idea is to simulate investment experience with “real” stocks, but “unreal” money (each of our two virtual portfolios had an initial corpus of Rs 10 lakh). Since it had rarely been tried before, the attempt could have been mis-read by either the media or stock experts.
We are happy to note that the idea has worked. Over the past few months, we have been impressed and surprised by the responses from readers on our Website. Some have dissected and deconstructed our decisions in a critical manner. More importantly, many have given insightful and intelligent suggestions for rejigging the portfolios. In many cases, where we didn’t pay heed to these ideas, the readers have been proved correct. It is now clear that our attempts to “educate” the investors have succeeded.
Over the past few years, the regulators have also initiated several investor education programmes. In addition, many motivated people have formed investor forums for the same purpose. And now, a leading pink paper has introduced a model portfolios-like feature. These are encouraging trends. It implies two things: one, more people have realised the need to make small investors smarter and savvier. Two, investors themselves are becoming more intelligent.
In the near future, we hope they will stop being part of a herd, or act with the “madness of the crowd”.
