The cover story (Who Will Blink First, April 2011) justifiably says that equities, as an asset class, provide the highest returns compared with other investments. However, small investors often find it hard to adopt a disciplined approach over the long term and tend to sell in panic at the slightest hint of trouble. This means retail investors are poor at timing their stock buying and selling decisions. Most invest when markets are trading at high levels and sell when they slide. Institutional investors, being more attuned to market developments, are better placed in this regard. Thus, the best route for retail investors, who do not track short-term movements or understand the implications of policy or organisational changes, is to go for mutual funds. Here, professional management will minimise downside risk.
- ANTONY DIAS, Goa
The story on stocks that rose 1,000% or more over the past six-year period (The Ones that Vaulted Past, April 2011) clearly shows that the equity market can give huge returns to investors. However, some stocks in the list, such as Core Projects and Technologies, Manapuram General Finance and Leasing and Kwality Dairy (also the biggest gainers), were trading at less than Re 1 at the beginning of the period. In this sense, these would have been categorised as penny stocks. So, as is often the case, retail investors would have been told to stay away from such stocks. It appears that there is a definite element of luck involved for one is to get invested in such shares.
- SANDEEP SINGH, Mumbai
The story on mutual funds (Is it Time to Dump your Fund? April 2011) deals with an interesting dilemma faced by most investors. Since mutual funds are generally sold as long-term investments, investors find it hard to decide when to exit. Many keep holding onto units even when there seems to be no hope of appreciation because of investment strategies adopted by the fund manager or due to developments in the market. Investors would benefit from the list provided by you on what one should look at to decide if a fund scheme should be sold.
- SIDDARTH DADWHAL, Mumbai
The section on travel was very well packaged. However, among your travel suggestions (Enthralling Escapades, April 2011), you seem to have neglected domestic destinations, with only one of the nine options being from within the country. This could, of course, be an indication that foreign travel is increasingly being seen as a better alternative to domestic tourism. In fact, going by the crowds at international airports during the summer holiday season, it does look like Indians, because of their growing wealth, increasingly prefer to travel abroad for holidays. Even so, it would have been good to see a few more domestic tourism spots being covered.
- AGASTHYA THAPA, Darjeeling
ERRATA
In the story on balanced funds (Profit from a Balancing Act, March 2011) the returns by Birla Sun Life 95 fund for the period 6 months, 1 year, 3 years and 5 years should have been 1.45%, 16.09%, 8.22% and 16.73%. The error is regretted.
