Part 2: Perspective or How to think about investing in a way that ensures success?
2.4 Having an ‘alter ego’ can give you super powers to invest successfully
We all have a fear of losing money, being wrong, feeling that we don’t the stuff required to succeed at investing. For many this prevents them from even attempting to invest. Or doing it half-heartedly. But there are and have been times in our lives that we have overcome such fears and doubts and achieved success, even breakthroughs. How do we reproduce this?
What do you do when you are faced with a big challenge in an area where you do not have adequate knowledge, skills, experience and confidence? Do you Flight or Fight? But what if a flight reaction is not appropriate and you know you shouldn’t resort to it. How do you then fight, respond to the challenge? Who fights?
This situation is common in investing. And many, far too many choose the flight option and stay away from the market. Others come into the market in an unresourceful state of mind- with all their doubts, lack of knowledge, skills and confidence and try to invest. This attempt at investing done from an unresourceful state of mind is bound to fail. It has failed even before they started.
Remember the Decision-making Self who hears the Thinking and Feeling Selves present their arguments and then makes the decision. I am talking about how you think about this entity. If you think about it as someone who lacks the stuff required to invest successfully, you will definitely fail. You need this Decision Maker to be something different.
That’s where you can benefit from creating and using your Investing alter ego. An alter ego is a secondary personality or self, often used to distinguish one's behavior in certain situations and deal with it more effectively. In short, if you think your current self by itself is not best suited to handle your investing, you refer to your alter ego when investing.
You choose which traits to impart to the alter ego. Say, someone who is sharp,...........Read More
MoneyWorks4Me method for rating and ranking mutual funds for SIP
MoneyWorks4Me rating and ranking of funds for SIP is available to subscribers only. Moneyworks4Me is not a rating and
ranking agency, however it is required that users have a way of selecting funds and building a Portfolio. The method used by it are described below to enable users to understand the logic behind the rating and ranking Subscriber will find more details on this in the
various content made available from time to time. In case you need more please write to besafe@moneyworks4Me.com
MoneyWorks4Me rates and ranks mutual funds based on the following data-driven system:
Performance Consistency: This is measure based on whether the fund has beaten the benchmark index consistently. For
this we compare the 3-year rolling returns of the fund with the benchmark for a minimum of 5 years and preferable 10
years. The period of rolling is one month and holding period is 3 years. Fund are color-coded Green on Performance when
the fund beats the benchmark more than 90% of the time. It is Orange if it beats 80% to 90% of the time and Red if less
than 80%. Funds with less than 5 year data are color-coded Grey.
Quality of Portfolio Holding: Moneyworks4Me has color-coded stocks as Green, Orange and Red based on whether the
company's performance has generated a ROCE above a threshold level (cost of capital) over 10 years (minimum 6 years) and
generated positive Free Cash Flow. For Banks it checks whether ROE is greater than 15% and sales has grown over previous
year. Stocks that perform consistently on these combined metrics are color-coded Green (min score 14 out of 20), Orange
(between 8 and 14) and Red (less than 8 out of 20).
Fund are color-coded Green provided the portfolio has 70% holding in Green stocks but not more than 20% in Red stocks.
Funds with more than 20% Red stocks in the portfolio are color-coded Red. The rest are Orange funds
Funds ranking in screeners: Performance Consistency and Quality are two parameters used for ranking funds for SIP. The
ranking as follows GG, GO, GR, OG, OO, OR, RG, RO and RR.
With the same color-coded funds, the one with the higher Average 3-year rolling returns (over 5 to 10 years), the number
that appears in the Performance tag, ranks higher.
Here is the summary:
The third tag Upside Potential is not relevant for SIP. It is relevant for lumpsum investments in Mutual Funds.
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Best Buy Stocks
Do you want to Invest in Undervalued Handpicked stocks and earn high Returns?
Why Buy Quality Stocks
Winning and long lasting portfolio is made of Quality Stocks, but how simple is that?
Important Questions while Buying Stocks
As an Investor most important decision making questions are?
Make an informed decision for Stocks
Invest using an intelligent system with powerful data-driven tools that help you identify opportunities and make informed buy-hold-sell decisions
You can make an informed decision based on:
Q : Quality :- Q Very Good
Q Somewhat Good
Q Not Good
V : Valuation:- V+UnderValued (UV) V Somewhat UV
V Fair Value
V Somewhat OV
V+ OverValued (OV)
Buy quality Stocks when they are available at reasonable prices and supported by an upward price trend and Sell when they are Overvalued using the Decizen Rating System. Covers 3500+ stocks
Make an informed decision for Funds
You can make an informed decision based on:
P : Performance (%)* 14 Very Good
14 Somewhat Good
12 Not Good
Less than 5 year data
Q : Quality of Holding Q Very Good
Q Somewhat Good
Q Not Good
*Color code for outperformance consistency
*Number is average 3 year rolling returns
Want to invest successfully in stocks?
How the heck do you select a solution that ensures it?
Does it get you focused on meeting your financial goals?
Does it get you focused on meeting your financial goals?
Investing is to means to funding your goals. Your solution must help you get clarity of your goals and how you should invest to reach them. Does your solution include Financial Planning?
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