Financial Freedom

  “Why I need a portfolio while I make enough money from trading?” Shahul asked me.  A regular day trader with consistent results, he knew what he was doing. So making profits or doubling investments wasn’t a concern. Scalping, the method in which traders make small profits using slight but sudden move in stock prices, was Shahul’s main technique. He focuses mainly on stocks that have reached their highest price in a year. “What do you do with your profits”, I asked, knowing that his question came from a place of ignorance and that I cannot send my answer to same place. “I spend! Shopping, vacations, you name it!” He was having fun, I could say. But being a Financial coach, I have to set him for goal based investing. “Have you planned out anything for your retirement and children’s college education?” I asked with concern. “I have Rs. 10 Lakhs in Fixed Deposits. I guess that’s enough.” Now, I can say that he was expressing more of a genuine doubt, as he looked at me

                           Do you call yourself an investor when you’ve never read an annual report? Annual reports are sent to shareholders at the end of every financial year and published on the company website.It summarizes the performance of the sector and the company.It is a ready reckoner   of products, market share, and financial situation of a company.Charlie Munger says," You must value the business in order to value the stock".Annual reports help us to obtain clarity and insight about the business and it's competitors.            Each annual report can be dismantled into four pieces- the director’s report, the auditor’s report, financial results and account notes. The director’s report describes the current economy and the sector, spreading light on the firm’s activities, challenges faced, opportunities to be tapped and future plans. Checking the information for flaws and comparing with other firms in the sector is the job of the investor. Here,

                                                        (Image Courtesy: Financial Express.)                      The market’s going up! The market’s going down! The market’s going sideways! People shout out their feelings of where the market’s about to go. But where it’s actually headed is not something anyone can predict. At the same time, if you participate in the market, you should have your own idea as to what’s going on- your unique perspective. The market currently reflects the presence of a bunch of optimistic participants. A strong-looking economy gave us hopes of an increase in GDP, but it failed to meet expectations in previous quarters.            Structural reforms always shake up the system, which is exactly what happened during demonetization and the GST rollout. These baby steps aimed at a better future, saw our reluctance in accepting change. Years of outcry against black money, but demonetization wouldn’t be worth our patience. A tax reform had been due for