How to invest your salary regularly in Stocks

hey everyone welcome to today's video so if you would have invested roughly 70 75 rupees in Amazon back in 1997 that investment today would have become roughly 84 lakh rupees you could have purchased a Ferrari you could have purchased a villa in Goa I don't know but to cut the long story short you could not have done anything because these are kayali returns and very similar to like kayali pulao you can't do anything with these imaginary returns we as normal retail investors do not have the patience to hold these type of things when things go up so dramatically we will cut our positions whenever we make even 30 40% gain but is there a systematic way to keep on investing our salary every month in sensible stocks so that it gives us good returns now I'm not promising 100,000% return or 500,000 return or th% return something like that I'm talking about investing in decent companies month-wise in a systematic manner can that be done and can you benefit from it as a normal retail investor so that is the conversation that we are going to have in five simple easy to understand steps and also along the video I will share my list of 10 stocks that I will do sips or systematic investment plan in now sip simply means that if I'm getting a salary of let's say 50,000 Rupees I'm able to take out 10,000 rupees for investing then I will put this 10,000 rupe spread across these 10 stocks so that is the list that I'm going to present now an important disclaimer this is not a push from my side to go and invest in these stocks please do your own due diligence please build your own own investment strategy and please be responsible for your own money so that is a simple message that I want to give out but I will give a very honest discussion analysis as to what sip based investing is why you should be doing it and present a list of stock along the way and this will be a well Diversified list of stock which comprises of both Indian and the US Stocks so let us get the discussion started and five simple points so Point number one is that what is Sip and what are the advantages and disadvantages of sip based investing so sip in simple words mean systematic investment plan this is also called as dollar cost averaging or rupe cost averaging please don't go after the terminology please understand the concept behind it the concept is fairly simple that you and I are making some kind of salary or some kind of cash flow every month through our job through our business etc etc we get a certain amount of money that we want to invest in the stock market in a systematic manner without thinking too much every single month in the stock market so can that be done and that process is called a systematic investment plan so let me take you to one of the key instruments in which sip is done and this is called as index based sip so basically if you are investing 10,000 rupees in index every month that is called as investing in index or running an sip in an index so you will pick that 10,000 rup fifth of every month or 10th of every month and you will keep on putting it on this index so your investment might look like these red dots that you are investing over a long period of time periodic Investments every month and in the long long run what will happen is that you will get averaging benefits because you can see that Nifty goes up in the long term SNP goes up in the long term and if you are investing periodically that period can be weekly also that period can be monthly also that period can be bonly also so if you invest in a periodic manner what advantages are you going to derive you will derive three key advantages number one you will get averaging benefits so what is meant by averaging benefits so let us pick an example so for example here if you investing in point a and you continue to invest in point B also here if you are putting 10,000 rupees you are buying fewer units at point B again you are putting 10,000 rupes here you will be buying more units so on an average you get to purchase more when the markets are down and you get to purchase less when the markets are up so this gives you averaging benefits and this reduces your risk in the stock market the second key advantage of sip or dollar cost averaging is that it creates a system of investment you might have noticed around you that when markets are running up everyone tries to chase the market they invest only when the markets are going up when markets fall there is a lot of panic people stop investing people stop their sip also if you go and meet some uncles in park for morning walk they will say that you know what I read some news that this is going to happen with this stock so why don't we all invest our money in it then after reading news people start making investment so all these are bad methods this is not a system of investment this is a system of Hing puning simply means that you're just going and gambling your money so doing sip based investment kills this puning it it builds a system for you it takes the Panic away from you you don't get super excited when the markets are going up you don't start panicking when the markets are going now so in very easy to understand language it kills the emotion in investing and that is a very very important skill to develop as an investor now comes the third gear advantage and this is one of the biggest mistake that investors make which is trying to time the market that I will invest the most when the market has fallen the most I will invest the least when the market has reached the top we can't do it and half of us keep on waiting in for the markets to correct or markets to go up so sip based investing kills this problem as well now let me very briefly touch upon the disadvantages of sip based investing so first and foremost it is super boring why because there is no thrill you are going and investing in the market every fifth of every month or 10th of every month in a systematic way and yeah you are not even following the market so it might not be thrilling for you and it is pretty boring so this is the first key problem that there is no thrill and what will you talk about with uncles that you find in park so that is the number one problem now the second key problem in terms of sip based investing is that you actually do not end up timing the market at all so you just forget about the market and sometimes it might actually make sense to time the market now what do I mean by that because this looks confusing so let me pick an example and explain so for example here you can see a downward falling curve here you can see a downward falling curve here you can see a downward falling curve so you should be investing more and more of your money during these downfalls you can back test this all the way to 1930 and people who have invested in these downward falling curves are the ones who end up making a lot of money it looks very scary when the markets are falling and every day your portfolio is getting rder and rder by the day and that is not a very appealing sign but if you're a constant sip based investor then you might not increase your investment amount when the markets are falling and this is a mistake that you should avoid in fact when the markets are falling that is when you should be purchasing even more aggressively now again our disclaimer that I'm not pushing you to go and invest in the market please do your own due diligence and please act as per your understanding I'm just sharing my viewpoint now comes the third key problem in terms of dollar cost averaging or sip based investing it is that you end up purchasing the entire index so for example if you're doing sip in nifty50 and if some bad stocks bad I mean according to your definition of bad if they are part of nifty50 then you inadvertently so the word of the day today is inadvertently I have covered it earlier so do let me know the meaning of the word inadvertently so inadvertently you end up investing money in bad stocks the stocks that you consider to be bad so for example let me pick my definition of a bad stock according to me and this is not a push that they this is a bad stock good stock you do your own due diligence I'm just picking this as an example so according to me something like bharti AEL is not a good stock but it is a part of nifty50 so you can check this on the list also that it is a part of nifty50 now why am I saying that something like bharti a is not a good stock because if I go check its price you will see two three key things so one you will see that bhel for a period of almost 10 years gave an average return of 0% right so it is a highly cyclical stock so to say so this is point one point two systematically if we study the fundamentals of bhel what you will figure out is that this is a high debt company so let me show that to you through ratios also so you can check debt to equity ratio and its debt is crazy right it is very very high levels of debt and this can be checked on the balance sheet also that its borrowing keeps on going up and up and up finally let us take a look at the growth of the company so if you take a look at sales or the total sales 10 years ago they have not even been able to double their sales in a period of roughly 1011 years so which is not a great sign for me so I would refrain from investing in such stocks but the problem with SIP based Nifty or sensex investing where you are trying to buy the index you have to by default get invested in these companies which I as an investor would want to avoid so according to me these are some of the advantages and disadvantages of sip based index investing so now comes the natural question that is there a way for me to avoid this index investing problem because I also don't want to get invested in something like bharti AEL and similar kind of stocks okay so typically speaking you have two options so number one is that you do index investing for example if you are investing in Indian index then you have to by default buy something like nifty50 or sensex if you are picking us then you have to buy something like S&P 500 or Vanguard fund from a global investing perspective so this is called as index investing and I have already discussed the advantages and disadvantages of it now comes the second method that you can create your own list of stocks and you can do this in India also and you can do this in the US also for example the knowledge partner on this video is vested so they have come up with a vest where I have created my own briefcase of US stocks and you can go and check it in the description box and if it looks okay to you then you can create a similar West for yourself this is absolutely free of cost there is no charges in terms of creating your own West so from that particular perspective you can create a vest on vested that can take care of US Stock Investing and similarly you can create a vest for Indian stocks also and you can start investing in it so your goal every month becomes to invest some amount of money in your US stocks and some amount of money in your Indian stocks now again not a push from my side if you're not a believer in US Stock Investing please do not invest please only invest in Indian stock similarly if you're not a believer in Indian Stock Investing please do not invest in Indian stocks just invest in US Stocks I am just suggesting all the options because I myself invest both in Indian and the US Stocks so now comes point three and four these are very important points that what type of West or what type of briefcase you should be designing of stocks that you want to do your sip in okay so let us speak about what type of stocks to add if you're a complete beginner so first and foremost pick simple stocks what are simple stocks simple stocks means that that are generating increasing revenues with every single year or almost every single year plus there are profits that can be seen on their balance sheet for example if I show you the chart for Hindustan unit labor you can clearly see that the sales have been going up there has been no problem second you can see that net profits have been going up there is no problem so it is very easy to identify these type of stocks remember another point that please do not invest in very high debt oriented companies because you will have to constantly monitor these so go take a look at debt to equity ratio here it is only 2% for airel it was close to 250% debt so very easy to identify simple clean stocks so these are the type of stocks in which you should be doing sip based investment this is point one now comes the second key point that whatever stocks you are adding in that vest or that briefcase it should look like a portfolio for example if you pick infosis also if you pick TCS also if you pick Vio also and you buy 10 such similar stocks then that is not a portfolio you have ended up putting all your money in just literally one sector so it doesn't look like a portfolio so please have a split of different different things for example you can have some Pharma stocks you can have some fmcg stocks you can have some banking stocks you can have some tech stocks so create a well-designed diversified portfolio now I will also show you how I will invest 1 lakh rupe in the 10 stocks that I'm talking about given all these three points that I'm currently speaking now comes the third point that whichever stocks you are adding to your portfolio it should align with your investing Style Now what is is meant by investing style now there are different different types of investors for example there are very aggressive investors which will only invest in very high growth asset for example Mr Vijay kadia he tries to invest a company very early invests a lot of money and he's okay losing money on eight of his Investments out of 10 because the two investment that will survive it will give him massive gains very similar to the Amazon story that I was telling you at the start so these are called as high-risk investors do you want to become like them I can't suggest if that is what you want then you can definitely create a slightly more aggressive portfolio on the flip side you can become a slightly more defensive investor that we will invest only in h and ITC type of companies that's it we don't want to lose a lot of money because equities are very risky so you are also not incorrect there so you need to figure out what type of investor you want to become now you'll say that actually this is getting like very complicated can you explain it by using a real world example yes so I will create a portfolio of 1 lakh rupee in front of you using the list of 10 stocks that I will be doing as IP in from this month onward but before that let us complete Point number four that what type of stocks you should not be adding into this portfolio so the answer there will be complete opposite to what I said as to what type of stocks you should be adding but let us quickly go through that list as well so three simple points that number one please avoid High Dead companies for example airel does it mean that you should never purchase High Dead companies I'm not saying it but what I'm categorically trying to say is that if you're doing sip in stocks where you are just putting money month after month please avoid highed companies this is one number two please don't invest in companies where you don't understand how they are making money a classic case in point according to me will be something like PTM I don't understand how PTM is making money anymore so I have not put even one rupee in PTM and that is the same Viewpoint that I have been expressing since the time even before PM's IPO launch so you can go and check it out on my previous videos third and finally please do not invest in only onedimensional on one type of stocks again the it example that itcs also Vio also infosis also and you know all stocks all it no please don't do it because what happens in the market is that there is something called a sector rotation there are times when certain sector will be pumped up so the entire it sector will go up then it will be pumped down so if you end up getting caught on the wrong side of the equation you might end up losing a lot of money so please hedge your portfolio please do not make your portfolio onedimensional now comes the fifth and final Point as to how will I invest 1 lakh rupees in an sip mode across 10 stocks that I'm picking so here is a list of 10 stocks why have I added these 10 stocks you can watch some of my previous videos on Amazon Microsoft Hindustan unil I recently made a video why did I purchase something like HDFC Bank access bank ICI I also talked about the fact why am I adding something like baj Finance so you can figure out my rational of adding all these stocks through my previous video so please go and watch those and I will link some of those videos in the description box also but now let me show you how will I be investing 1 lakh rupes now you say aat 1 lakh rupes is is too much how will I get access to 1 lakh rupe every month so please adjust the amount don't make it 1 lakh make it a fraction so if you can invest 10,000 rupees that is also fine you can follow the same methodology so if I have 1 lakh Rupees to invest every month then I will invest roughly 30 to 40% of my money in tech companies in the US because I do not buy Indian tech companies TCS is the first tech stock that I'm buying as of now in India but other than that I'm buying all my tech stocks outside India so 30 to 40% of that money will go where to companies like Amazon Apple Microsoft especially now because these companies from their top have corrected by even 3030 40 40% so I'll be aggressively doing sip as of now given the market dynamics here second key category of stocks that I will purchase it will be Financial companies in India so I buy Finance stocks only in India so here I will invest roughly 40% so my money will go to companies like HDFC Bank ICICI access and HDFC EMC also I know I'll get a a lot of heat but yeah so these type of companies I'll be purchasing every month now remainder of my portfolio which is between like 20 to 30% will be slightly more defensive so this would comprise of companies like dber nesle H Etc so these are some of the key companies that I will be purchasing now my portfolio size is big I will not get into speculation some will say that a we saw your portfolio no that was not my portfolio that was just last year's portfolio so to say I have multiple dmat accounts as of now and I segregate my year-wise investing into different dmat account I'll make us separate video on that but to cut the long story short this is what my portfolio will look like that 40% Finance roughly 30 to 40% Tech and roughly 20 to 30% defensive so you can let me know whichever stocks you are not clear on I'll make specific dedicated videos on that so do let me know in the comment box if there are detailed videos you would want to make why am I adding these stocks I'll be happy to do it now before I let you go let me encapsulate a few key points regarding this style of investing Point number one if you are investing let's say 10,000 rupees as sip there are some stocks for example let's say baj Finance cost 4,000 rupees as of now so you would not be able to buy baj Finance type of stock every month so what you should be doing you should be buying it every alternate month so that is how you should adjust as per the Quantum of money that you're investing this is point one point two when the markets are moving up there will be stocks in your list or in your West that will be moving further higher than the market so be more conservative in investing in those stocks as per the market dynamics so please track the market dynamics this is not buy and forget type of a strategy similarly if the markets have corrected quite a lot then increase your sip amount try to invest even more money that month if possible third and finally please make notes about the market there are Market changing circumstances you have to stay on top of things investing is an active game it is not a passive game that you know you have invested buy and forget it will become like an Amazon like story for you no it doesn't work that way let me reveal the answer as to why retail investors usually do not make 120,000 per gains on stocks like Amazon very simply because once the stock moves up by 40 50 60% we do not have the patience to hold it and I'm not saying that you should have the patience to do it because no one would have that Zen level of patience but the important point is that every month you should identify good opportunities to invest and invest in a systematic way because every month you do get opportunities to invest so please do not forget it please create a system please understand your investing appetite and investing risk and try to identify the type of investor you are I hope you enjoyed the video please press the like button share it with your friends and I will see you soon

Channel: Akshat Shrivastava

Views: 1,294,426

Keywords: akshat shrivastava, us stocks, how to invest in us stocks, dollar value, inr and dollar, making money, us vested, investing in us market, investing for beginners, invest in stock market, how to invest, find good stocks, elon musk, tech stocks, us market crash, indian economy, market crash, amazon, tata consultancy service, inflation, inflation in us, valuation, tcs, indian market, buy the dip, stocks i am buying

Id: S-ftZp4xTnk

Length: 18min 57sec (1137 seconds)

Published: Thu Jun 23 2022