Your cover story on the stock market (Winning Stocks, August 2011) shows that, despite range-bound markets, institutional investors, including mutual funds and foreign institutional investors (FIIs), have been selectively raising their stake in several stocks. This will surely give an indication to retail investors on which stocks to buy for the long term. The views of the analysts from brokerage houses on the various sectors and their top picks will also aid investors in making a choice. However, as your data points out, several institutional picks have also given negative returns over the past six months. It is clear that investors should not look for big returns in a short span in the current market situation. Only if one remains invested for a long period, meaning between three to five years, can one hope to ride out the ups and downs and make enough money to beat the negative impact of inflation.
Srinivasan Shankar, e-mail
Buying a home in the hills as a summer retreat or second home is surely gaining popularity as mentioned in your story (Lure of the Mountains, August 2011). As a native of one of the hill regions, to me, the trend is a bit disconcerting since large-scale property development in these areas will surely damage the landscape while only a few wealthy investors will benefit. While it may be a good investment opportunity, too many commercial projects disrupting the ecology of such areas is not desirable. For this reason, the restrictions that are in place in purchasing property in hill areas should continue and, in fact, be strengthened to ensure that there is no large-scale migration. This is especially pertinent given the fact that major cities are already choked with people without commensurate improvement in infrastructure.
Arjun Singh, Darjeeling
The stories on interpreting quarterly results and reading an investment prospectus will surely be of practical use (For Better Results, Powered by Knowledge, August 2011). A simple guide of such sort will be very handy for general investors who will gain from access to the most useful information and from knowing what to look for before buying into IPOs, mutual funds and insurance products. While regulators have made it mandatory for companies to come out with several disclosures, there are not enough investor education programmes to increase awareness of what those disclosures mean, rendering them ineffective for investors.
Katherine Braganza, Panaji
The story on the benefits of having a diversified portfolio (Get a High from an Asset Cocktail, August 2011) has interestingly pointed out that too many things in one's portfolio could lead to a situation of 'di-worsification'. Such over-diversification becomes counter-productive. In fact, my own experience shows that when there are too many stocks in a portfolio, it is hard to track developments for each of them and in the end one ends up as a loser in many instances.
Nandan Kumar, Pune