Stocks are the most rewarding of all investment options. They are also almost risk-free in the long term. Both these hypotheses have been proven beyond doubt in the pages of MONEY TODAY several times over in the past.
Yet, a majority of investors either stay away from stocks or treat it only as a thin layer of icing on their financial portfolio. Put some money in an IPO here or a "hot tip" stock there and sell it or hold it without much thought. Gains are treated as lottery and losses as the expected cost of a gamble. Stocks are almost never the centrepiece of financial portfolio — a thick slice of the cake, rather than the thin icing.
This has something to do with the way information and analysis on stocks appears in the media. While free tips on "multibaggers" (stocks that are likely to give a very high return) abound, there is little for investors beyond that—how long to hold the stock? When to sell it and buy another? Most important, what to do if the proclaimed multibagger, turns out to be a "multi loser"?
Boldness in recommending stocks must also be matched with courage in admitting bad advice and offering options and strategy to deal with it. At MONEY TODAY, we have always been obsessed with bridging the preachingpractice divide, especially when it comes to advice on stock investing. In our two model stock portfolios — Wealth Zoom and Safe Wealth — we seem to have found this Holy Grail.
In every issue since we introduced these portfolios in June 2007, Dipen Sheth, our fund manager, has been able to keep the promise of filling the gap between advice and action and keeping a score on how his ideas are making (or burning) money for you.
Regular readers of our model portfolios (many of whom have shared their thoughts and ideas with us) would vouch that the biggest takeaway from these portfolios has not been the fantastic returns on investments (104% and 68% annualised, so far) but the wisdom that Dipen has shared with us on buying, selling and holding stocks in different market conditions. His writings on model portfolios are like chapters of a bestselling book on theory and practice in stock investing.
As you earn and learn from Dipen's words, our well-known columnist on stocks Mudar Patherya has decided to go beyond the limelight for you. Beginning this issue, his renamed column "Under The Radar" will pick one small but high-potential stock and give his take on it.
Our cover story deals with the topic top-most in your mind right now — income tax. We also tell you why tax saving has become much more than just that.
