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Money Today readers write back to the Editor with their feedback

Money Today readers write back to the Editor with their feedback

Money Today readers write back to the Editor with their feedback on the magazine's personal finance coverage.

The cover on choosing stocks from among those that are trading at their year's low (Picking from the Lows, August 2012) was quite informative. I regularly scan the 52-week low tables to look for stocks that may be good investments. The clear message is that, as a general rule, one needs to analyse the basic strength of the stocks and not buy only because of the market price. Stocks that have been trading at their 52-week low or even their all-time low do not necessarily become good investment options just because of their low valuations. An investor runs the risk of erosion of capital as the stock can dip further if the company itself is not doing well. Or worse, the stock can languish at those low levels for a long duration. But, if the price dip is due to temporary factors impacting the sector, then the stock could be a good buy.

The fact that risks are always high in the equity market is evident from your story (Big Names, No Gain, August 2012). The several stocks that were analysed in the story, including BHEL, Reliance Industries, NTPC and Tata Power, are blue chips but have still given negative returns over the past three years. I hold some of these stocks in my portfolio but, fortunately, they don't form a major chunk of my investment. However, at the same time, I feel that these are relatively safe stocks and will see a lower downside in volatile markets compared with other stocks and would be good bets to provide the portfolio with a cushion.

The article on calculating expected returns from fixed maturity plans (Evaluating Returns, August 2012) was highly informative. I invested in FMPs recently. And now I am in a better position to understand what to expect from my investments after reading the article. Such articles, explaining technical issues in simple terms, would improve financial literacy levels in the country and encourage more people to invest in options that are considered unsafe because these are hard to understand.
SURESH NAIK, Mangalore

I have been thinking of investing in a mutual fund, my first investment in the market, for some time. With a plethora of choice and funds having similar star-ratings, I have been struggling to choose one. Your story on how to choose one's first mutual fund (An Ideal Debut, August 2012) has given me some direction. It is still a difficult exercise as not many financial advisors and distributors are interested in giving advice on funds as they do not get a substantial commission on such products. I hope that changes soon.