How to invest your salary regularly in Stocks

Hello everyone, welcome to today's video, so if you had

invest

ed approximately Rs 70 75 in Amazon in 1997, that

invest

ment today would have become approximately Rs 84 lakh, you could have bought a Ferrari, you could have bought a villa in Goa , I don't know. but to make a long story short, you couldn't have done anything because these are returns of khayali and very similar to khayali pulao, you can't do anything with these imaginary returns. We as normal retail investors don't have the patience to hold this kind of When things go up so dramatically, we will trim our positions every time we make a profit of even 30-40 percent, but is there a systematic way to keep investing our

salary

every month in sensible actions so that they give us good returns?

I don't promise. One hundred thousand percent return or 500,000 return or one thousand percent return something like that. I'm talking about investing in decent companies on a monthly basis in a systematic way. Is it possible to do that? Can you benefit from it as a normal retail investor? That's the conversation. which we are going to have in five simple and easy to understand steps and also throughout the video I will share my list of 10

stocks

that I will do sips or a systematic investment plan now, sip simply means that if I receive a

salary

of let's say 50,000 rupees.

I can take out 10,000 rupees to invest, then I will put this 10,000 rupees spread across these 10

stocks

, so that is the list I am going to present now. An important disclaimer. This is not a push on my part. side to go and invest in these stocks, do

your

own due diligence, create

your

own investment strategy and be responsible for your own money, so that's a simple message I want to give, but I will give a very honest discussion analysis like Why should I do it and present a list of actions along the way? This will be a well diversified list of stocks which comprises of both Indian and US stocks so let's start the discussion and Five simple points then point number one is what is SIP and what are the advantages and disadvantages of SIP based investment .

So SIP in simple words means systematic investment plan. This is also called dollar cost averaging or rupee cost averaging, please don't chase it. The terminology, please understand the concept behind this, the concept is quite simple: you and I earn some kind of salary or some kind of cash flow every month through our work, through our business, etc., we get a certain amount of money we want. Invest in the stock market systematically without thinking too much every month about the stock market. That can be done and that process is called systematic investment plan, so let me take you to one of the key instruments on which SIP is executed. and this is called index based sips so basically if you are investing 10,000 rupees in an index every month that is called investing in an index or running a sip on an index then you will choose that 10,000 rupees on the fifth of each month or the tenth of all the months and will continue to include it in this index, so your investment could look like these red dots that you are investing over a long period of time, periodic investments every month and in the long term, what What will happen is that you will make average profits. because you can see that nifty goes up in long term, snp goes up in long term and if you invest periodically that period can be weekly and also that period can be monthly and that period can be bi-monthly also, so if you invest periodically, what advantages will you get?

You will get three key benefits, number one, you will get averaged profits, so what is meant by averaged profits? Let us pick an example, for example here, if you are investing in point a and Continue investing in point b also here if you are putting Rs 10,000, you will be buying less units in point b again, you are putting Rs 10,000 here, you will buy more units, so on average you will be able to buy more when the markets are down and you can buy less when the markets are up, so this gives you average profits and reduces your risk in the stock market.

The second key advantage of sip-per-dollar cost averaging is that it creates an investment system that you may have noticed in your environment. so when the markets go up everyone tries to chase the market, they invest only when the markets go up, when the markets go down there is a lot of panic, people stop investing, people stop drinking also if you go and meet some guys in the park in the morning. walk they will say you know what I read some news that this is going to happen with this talk, so why don't we all invest our money in it?

Then after reading the news people start making investments, so these are all bad methods, this is not. an investment system, this is a counter system, counter simply means that you just go and bet your money, so making a sip based investment kills this reflection, builds a system for you, takes away the panic, no comes back super. excited when the markets go up, you don't start panicking when the markets go down, so in very easy to understand language it kills the excitement in investing and that is a very, very important skill that you need to develop as an investor.

Now comes the third key. advantage and this is one of the biggest mistakes that investors make, which is trying to time the market. I will invest more when the market has fallen more. I will invest less when the market has peaked. We can not do it. and half of us are still waiting for the markets to correct or rise, so sip-based investing also eliminates this problem. Now let me briefly address the disadvantages of SAP based investing, so first of all it's super boring, why? It's not exciting, you go and invest in the market every fifth of every month or tenth of every month systematically and yeah you're not even following the market so it may not be exciting for you and it's pretty boring so this is The first key problem is that there is no emotion and what will you talk about with the guys you meet in part, so that is the number one problem now.

The second key problem in terms of sit-based investing is that you don't actually end up timing. the market at all so you just forget about the market and sometimes it might make sense to time the market now, what do I mean by that? Because this seems confusing, so let me pick an example and explain it, for example, here you can see a drop. falling curve here you can see a falling falling curve here you can see a falling falling curve so you should invest more and more money during these dips. You can backtest this back to 1930 and the people who have invested in these dips.

The downward curves are the ones that end up making a lot of money. It's very scary when the markets are falling and your portfolio is getting redder and redder every day and that's not a very attractive sign, but if you're a constant sipper. investor then you may not increase your investment amount when the markets are falling and this is a mistake you should avoid, in fact when the markets are falling, that is when you should buy even more aggressively now again our disclaimer That I am not pressuring you should go and invest in the market, please do your own due diligence and act according to your understanding.

I'm just sharing my point of view. Now comes the third key problem in terms of dollar cost averaging or sip based investing, is that you end up buying. the entire index so for example if you are sipping on nifty 50 and if some bad stocks are bad i mean your definition of bad if they are part of nifty 50 then inadvertently the word of the Today is, without realizing it, that I have covered. I also did it before, so let me know the meaning of the word without realizing it, so without realizing it you end up investing money in bad stocks, the stocks that you consider bad, so for example, let me choose my definition of bad stock according to me and this is It's not a push that this is a bad action, good action, you do your own due diligence.

I am just choosing this as an example so in my opinion something like bharti airtel is not a good stock but it is part of nifty 50. so you can also check this in the list which is part of nifty 50. Now, why am I saying that something like Bharti Airtel is not a good stock? Because if I look at your price, you'll see two, three key things, so you'll see one. that bharti airtel over a period of almost 10 years gave an average return of zero percent so it is a highly cyclical stock so to speak this is 0.1.2 systematically if we study the fundamentals of bharti airtel what you will find out is This is a highly leveraged company so let me show you through ratios as well so you can check the debt to equity ratio and their debt is crazy right there are very high levels of debt and this can also be verified on the balance sheet. debt keeps going up and up, let's finally look at the growth of the company, so if you look at sales or total sales 10 years ago, they haven't even been able to double their sales in a period of about 10 or 11 years, which which is not a good sign for me, so I would refrain from investing in such stocks, but the problem with SAP based nifty or sensex investments, where you try to buy the index, you have to default invest in these companies. which I as an investor would want to avoid, so in my opinion these are some of the advantages and disadvantages of SIP based index investing, so now the natural question arises is there any way to avoid this problem indexed investment because me neither?

I don't want to invest in something like Bharti hotel and similar types of stocks. Okay, usually you have two options, so number one is to invest in indices, for example, if you are investing in Indian indices, then you should by default buy something like. nifty 50 or sensex if you choose us then you have to buy something like s p 500 or vanguard fund from a global investment perspective that's why this is called index investing and I have already discussed its advantages and disadvantages. Now comes the second method. you can create your own stock list and you can also do this in India and you can also do this in the US for example the knowledge partner in this video has rights so they have come up with a west where I have created my own briefcase. of US Stocks and you can go and check it in the description box and if it's okay with you, I can create a similar vest for you.

This is absolutely free of course, there are no charges in terms of creating your own scraps, so from that. From a particular perspective you can create a west on Wested which can take care of investing in US stocks and similarly you can also create a west for Indian stocks and you can start investing in it so that your target every month is to invest a certain amount of money in your United States. shares and a certain amount of money in your Indian shares now again, it's not a push from me if you don't believe in investing in US shares, please don't invest, invest only in Indian shares similarly if you don't believe in investing in Indian stocks Please do not invest in Indian stocks, only invest in US stocks.

I am just suggesting all the options because I myself invest in both Indian and US stocks, so now comes points three and four, these are very important points about what kind of West or what kind. from the briefcase, you should design the actions in which you want to make your sip, so let us talk about what kind of actions to add if you are a complete beginner, so first of all, choose simple actions, what are simple actions? Simple stocks mean that they are generating increasing revenue every year or almost every year, plus there are profits that can be seen on their balance sheet, for example, if I show you the graph of Hindustan Unilever, you can clearly see that the sales have increased. no problem, second, you can see that the net profits have increased, no problem, so it is very easy to identify this type of stock.

Remember another point: do not invest in very high debt-oriented companies because you will have to monitor them constantly. so take a look at the debt to equity ratio here, it's just two percent for Airtel, it was close to 250 percent debt, so it's very easy to identify simple and clean stocks, so these are the kind of stocks you should make a sip-based investment in. This is point one. Now comes the second key point: Whatever stocks you add in that best or in that briefcase, it should be seen as a portfolio, for example, if you choose Infosys and also if you choose TCS and if you choose Wipro also and buy 10 such stocks . similar stocks then that's not a portfolio, you ended up putting all your money literally in one sector so it doesn't look like a portfolio so split up different things e.g.you may have some pharmaceutical stocks that you may have.

Some FMCG stocks, you may have some banking stocks, you may have some technology stocks, so build a well-designed diversified portfolio now. I will also show you how I will invest one lakh rupees in the 10 stocks I am talking about, given these three. The points I am currently talking about, now comes the third point: Whatever stocks you add to your portfolio, they should align with your investing style. What is meant by investment style? Now there are different types of investors, for example, there are very aggressive investors. that you will only invest in very high growth assets, for example, Mr.

Vijaycadia, you try to invest a company very early, you invest a lot of money and you are fine losing money on eight of your 10 investments because the two investments that will survive will give you your massive profits They are very similar to the Amazon story I was telling you at the beginning, which is why they are called high-risk investors. Do you want to be like them? I can't suggest if that's what you want then you can definitely create a more aggressive portfolio on the other hand you can become a bit more defensive investor we will invest only in hul and itc type of companies that's all we don't want to lose a lot of money because stocks are very risky so you are not wrong about that either so you need to figure out what kind of investor you want to become now you will say this is actually getting very complicated can you explain it using a real world example ?

Yes, then I will create a portfolio of one lakh rupees in front of you using the list of 10 stocks that I will be adding from this month onwards, but before that, let me complete point number four on what kind of stocks I should not add to this portfolio, so the answer will be completely opposite to what I said as far as what type of stocks you should add, but let's quickly go over that list as well. so three simple points, number one, avoid high debt companies eg airtel. Does it mean you should never buy companies with high fatalities?

They are just investing money month after month, please avoid companies with high debt, this is number two, please do not invest in companies where you do not understand how they are making money. The classic example, according to me, will be something like paytm, I don't do that. I don't understand how Paytm makes money anymore so I haven't put a single rupee into Paytm and that is the same view I have been expressing ever since even before the launch of Paytm IPO so you can go and See it in my previous videos. Third and last, please do not invest only in one dimension in one type of stock again.

The example of this we also demonstrated is Infosys and you know all the stocks. No please don't because what happens in the market is that there is something called sector rotation, there are times when a certain sector will activate so the entire id sector will go up and then it will go down so If you end up caught on the wrong side of the equation, you could end up losing. a lot of money, so cover your portfolio, don't make your portfolio one-dimensional. Now comes the fifth and final point on how I will invest one lakh rupees in sip mode in 10 stocks that I am picking, so here is a list. out of 10 stocks, why did I add these 10 stocks?

You can watch some of my previous videos on amazon microsoft hindustan unilever. I recently made a video why I bought something like hdfc bank access bank icici. I also talked about the fact why I'm adding something. I like Bajaj Finance so you can find out my reason for adding all these stocks through my previous video so go and watch them and I will link some of those videos in the description box as well but now let me show you how I will invest one. lakh rupees now you will say akshat one lakh rupees is too much, how will I have access to one lakh rupees every month?

So adjust the amount, don't make it one lakh, make it a fraction, so if you can invest ten thousand rupees, It's also okay, you can follow the same methodology, so if I have one lakh rupees to invest every month, I will invest approximately 30-40 percent of my money in technology companies in the US because I do not buy Indian technology companies. Tcs is the first. technology stocks that I am buying as of now in India, but other than that, I am buying all my technology stocks outside of India, so 30 to 40 percent of that money will go to companies like Amazon Apple Microsoft, especially now because these companies of their main They have even corrected 30 30 40 40, so I will sip aggressively from now on, given the market dynamics here.

The second key category of stocks that I will buy will be financial companies in India, so I buy financial stocks only in India, so here. I will invest about 40 percent so my money will go to companies like hdfc bank icici access and hdfc emc. I also know that I will get a lot of pressure, but yes, I will buy these types of companies every month now the rest of my portfolio that is between 20 and 30 will be a little more defensive, so it would be made up of companies like Davar Nestle Hul, etc. ., so these are some of the key companies I will buy now.

The size of my wallet is large. I will not enter into speculation. I will say that we actually looked at their portfolio which was not my portfolio, which was just last year's portfolio, so I have multiple DMAT accounts as of now and I segregate my ear investments into different DMAT accounts. I'll do a separate video on that. but to summarize, here's what my portfolio will look like: 40 financials, about thirty to forty percent and about twenty to thirty percent defensive, so you can tell me about the stocks you're not sure about. videos about that, so let me know in the comment box if there are detailed videos you would like to make, why am I adding these actions?

I will be happy to do it now before I let you go, let me summarize some key points regarding This investment style is the number one point if you are investing let's say 10,000 rupees as there are some stocks for example let's say Bajaj Finance costs 4 000 rupees as of now, so you will not be able to buy Bajaj Finance type shares every month. so what you should do is buy it every alternate month, that's how you should adjust based on the amount of money you're investing. This is point one, point two, when the markets move up, there will be stocks on your list. or in its west, that will move higher than the market, so be more conservative in investing in those stocks based on the market dynamics, so keep track of the market dynamics.

This is not a buy and forget type of strategy, similarly, if the markets have corrected quite a bit. a lot, then increase the amount of your sip, try to invest even more money that month if possible, third and finally, take notes about the market, there are circumstances that change the market, you must be aware of everything, investing is an active game , it is not a passive game. that you know you have invested, buy and forget it, it will become an Amazon like story for you, no it doesn't work that way, let me reveal to you the answer of why retail investors usually don't make profits of 120,000 on stocks like Amazon very simply. because once the stock goes up 40 50 60 we don't have the patience to hold it and I'm not saying 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 systematically because every month you have opportunities to invest, so don't forget, create a system, understand your investment appetite and investment risk and try to identify the type of investor.

I hope you enjoy the video, hit the like button, share it with your friends and I'll see you soon.