The Value of Stocks of a Company

The debate rages all over Eastern and Central Europe, in countries in transition as well as in Western Europe. It raged in Britain during the 80s: Is privatization really the robbery in disguise of state assets by a select few, cronies of the political regime? Margaret Thatcher was accuse of it - and so was the Agency of Transformation in the Republic of Macedonia. At what price should the companies owned by the State have been sold? This question is not as simple and straight forward as it sounds.

There is a gigantic stock pricing mechanism known as the Stock Exchange. Willing buyers and willing sellers meet there to freely negotiate deals of stock purchases and sale. Every day new information, macro-economic and micro-economic, determines the value of companies.

Greenspan testifies, the economic figures are too good to be true and the rumour mill starts working: interest rates might go up. The stock market reacts with a frenzy - it crashes. Why?

A top executive is asked how profitable will his firm be this quarter. He winks, he grins - this is interpreted by Wall Street to mean that they WILL go up. The share goes up frantically: no one wants to sell it, everyone want to buy it. The result: a sharp rise in the price. Why?

Moreover: the price of the stock prices of companies A with an identical size, similar financial ratios (and in the same industry) barely budges. Why didn't it display the same behaviour?

We say that the stocks of the two companies have different elasticity (their prices move up and down differently), probably the result of different sensitivities to changes in interest rates and in earnings estimates. But this is just to rename the problem. The question remains: why? Why do the shares of similar companies react differently?

Economy is a branch of psychology and wherever and whenever humans are involved, answers don't come easy. A few models have been developed and are in wide use but it is difficult to say that any of them has real predictive or even explanatory value. Some of these models are "technical" in nature: they ignore the fundamentals of the company. Such models assume that all the relevant information is already incorporated in the price of the stock and that changes in expectations, hopes, fears and attitudes will be reflected in the prices immediately. Others are fundamental: these models rely on the company's performance and assets. The former models are applicable mostly to companies whose shares are traded publicly, in stock exchanges. They are not very useful in trying to attach a value to the stock of a private firm. The latter type (fundamental) models can be applied more broadly.

The value of a stock (a bond, a firm, real estate, or any asset) is the sum of the income (cash flow) that a reasonable investor would expect to get in the future, discounted at the appropriate discount (usually, interest) rates. The discounting reflects the fact that money received in the future has lower (discounted) purchasing power than money received now. Moreover, we can invest money received now and get interest on it (which should normally equal the discount). Put differently: the discount reflects the loss in purchasing power of money not received at present or the interest that we lose by not being able to invest the money currently (because we will receive it only in the future). This is the time value of money. Another problem is the uncertainty of future payments, or the risk that we will not receive them. The longer the period, the higher the risk, of course. A model exists which links the time, the value of the stock, the cash flows expected in the future and the discount (interest) rates.

We said that the rate that we use to discount future cash flows is the prevailing interest rate and this is partly true in stable, predictable and certain economies. But the discount rate depends on the inflation rate in the country where the firm is (or in all the countries where it operates in case it is a multinational), on the projected supply of the shares and demand for it and on the aforementioned risk of non-payment. In certain places, additional factors must be taken into consideration (for example: country risk or foreign exchange risks).

The supply of a stock and, to a lesser extent, the demand for it determine its distribution (how many shareowners are there) and, as a result, its liquidity. Liquidity means how freely can one buy and sell it and at which quantities sought or sold do prices become rigid. Example: if a lot of shares is sold that gives the buyer the control of a company - the buyer will normally pay a "control premium". Another example: in thin markets it is easier to manipulate the price of a stock by artificially increasing the demand or decreasing the supply ("cornering" the market).

In a liquid market (no problems to buy and to sell), the discount rate is made up of two elements: one is the risk-free rate (normally, the interest payable on government bonds), the other being the risk related rate (the rate which reflects the risk related to the specific stock).

But: what is this risk rate?

The most widely used model to evaluate specific risks is the Capital Asset Pricing Model (CAPM).

According to it, the discount rate is the risk-free rate plus a coefficient (called beta) multiplied by a risk premium general to all stocks (in the USA it was calculated to be 5.5%). Beta is a measure of the volatility of the return of the stock relative to that of the return of the market. A stock's Beta can be obtained by calculating the coefficient of the regression line between the weekly returns of the stock and those of the stock market during a selected period of time.

Unfortunately, different betas can be calculated by selecting different parameters (for instance, the length of the period on which the calculation is performed). Another problem is that betas change with every new datum. Professionals resort to sensitivity tests which neutralize the changes that betas undergo with time.

Still, with all its shortcomings and disputed assumptions, the CAPM should be used to determine the discount rate. But to use the discount rate we must have what to discount, future cash flows.

The only relatively certain cash flows are the dividends paid to the shareholders. So, Dividend Discount Models (DDM) were developed.

Other models relate to the projected growth of the company (which is supposed to increase the payable dividends and to cause the stock to appreciate in value).

Still, DDM require, as input, the ultimate value of the stock and growth models are only suitable for mature firms with a stable and not too high dividend growth. Two-stage models are more powerful because they combine both emphases: on dividends and on growth. This is because of the life-cycle of firms: at first, they tend to have a high and unstable dividend growth rate (the DDM tackles this adequately). As the firm matures, it is expected to have a lower and stable growth rate, suitable for the treatment of Growth Models.

But how many years of future income (from dividends) should we use in a our calculations? If a firm is profitable now, is there any guarantee that it will continue to be so in the next year, the next decade? If it does continue to be profitable - who can guarantee that its dividend policy will not change and that the same rate of dividends will continue to be distributed?

The number of periods (normally, years) selected for the calculation is called the "price to earnings (P/E) multiple". The multiple denotes by how much we multiply the (after tax) earnings of the firm to obtain its value. It depends on the industry (growth or dying), the country (stable or geopolitically perilous), on the ownership structure (family or public), on the management in place (committed or mobile), on the product (new or old technology) and a myriad of other factors. It is almost impossible to objectively quantify or formulate this process of analysis and decision making. In telecommunications, the range of numbers used for valuing stocks oa private firm is between 7 and 10, for instance. If the company is in the public domain, the number can shoot up to 20 times the net earnings.

While some companies pay dividends (some even borrow to do so), others just do not pay. So in stock valuation, dividends are not the only future incomes you expect to get. Capital gains (profits which are the result of the appreciation in the value of the stock) also count. This is the result of expectations regarding the firm's free cash flow, in particular the free cash flow that goes to the shareholders.

There is no agreement as to what constitutes free cash flow. In general, it is the cash which a firm has after sufficiently investing in its development, research and (predetermined) growth. Cash Flow Statements have become a standard accounting requirement in the 80s (starting with the USA). Because "free" cash flow can be easily extracted from these reports, stock valuation based on free cash flow became increasingly popular and feasible. It is considered independent of the idiosyncratic parameters of different international environments and therefore applicable to multinationals or to national firms which export.

The free cash flow of a firm that is debt-financed solely by its shareholders belongs solely to them. Free cash flow to equity (FCFE) is:

FCFE = Operating Cash Flow MINUS Cash needed for meeting growth targets

Where

Operating Cash Flow = Net Income (NI) PLUS Depreciation and Amortization

Cash needed for meeting growth targets = Capital Expenditures + Change in Working Capital

Working Capital = Total Current Assets - Total Current Liabilities

Change in Working Capital = One Year's Working Capital MINUS Previous Year's Working Capital

The complete formula is:

FCFE = Net Income PLUS

Depreciation and Amortization MINUS

Capital Expenditures PLUS

Change in Working Capital.

A leveraged firm that borrowed money from other sources (could also be preferred stockholders) has a different free cash flow to equity. Its CFCE must be adjusted to reflect the preferred dividends and principal repayments of debt (MINUS sign) and the proceeds from new debt and preferred stocks (PLUS sign). If its borrowings are sufficient to pay the dividends to the holders of preference shares and to service its debt - its debt to capital ratio is sound.

The FCFE of a leveraged firm is:

FCFE = Net Income PLUS

Depreciation and Amortization MINUS

Principal Repayment of Debt MINUS

Preferred Dividends PLUS

Proceeds from New Debt and Preferred MINUS

Capital Expenditures MINUS

Changes in Working Capital.

A sound debt ratio means:

FCFE = Net Income MINUS

(1 - Debt Ratio)*(Capital Expenditures MINUS

Depreciation and Amortization PLUS

Change in Working Capital).

About The Author

Sam Vaknin is the author of "Malignant Self Love - Narcissism Revisited" and "After the Rain - How the West Lost the East". He is a columnist in "Central Europe Review", United Press International (UPI) and ebookweb.org and the editor of mental health and Central East Europe categories in The Open Directory, Suite101 and searcheurope.com. Until recently, he served as the Economic Advisor to the Government of Macedonia.

His web site: http://samvak.tripod.com

In The News:

Best large & mid cap mutual funds to invest in 2019  Economic TimesThe re-categorisation and rationalisation of mutual funds by Sebi last year created some new categories, including the large & mid cap mutual fund category.
Under pressure to perform well, MFs bought & sold these stocks in December quarter  Economic TimesMFs increased their stake by more than 1 per cent in at least 41 stocks.
Fund managers' picks: Large, mid & smallcap stocks that MFs bought, sold in Dec  Moneycontrol.comMF assets declined to Rs 22.8 lakh crore in December 2018 from Rs 23.4 lakh core in Nov 2018 on the back of moderation in the flows in equity funds and ...
Mutual funds may need smart bets on smallcap stocks to beat ETF show  Economic TimesSmallcap stocks could see up to ₹1 lakh cr inflow as fund managers look for potential winners: Analysts.
Hot and Cold Stocks of Mutual Funds in November 2018  MoneylifeIn November 2018, Axis Bank and ICICI Bank were the most preferred stocks of Indian mutual funds.
Money with Monika Season 2, Episode 2: Mutual funds versus direct stocks  LivemintIn this episode of Money With Monika, personal finance expert Monika Halan talks about the benefits of choosing a mutual fund over direct stock investments.
Should investors worry about P/E ratio of mutual funds?  Economic TimesPrice to earnings or P/E ratio is an important parameter in the world of stocks. Some pundits believe that it is time mutual fund investors start taking the P/E ratio ...
Remembering Jack Bogle, colossus of mutual fund industry  LivemintVanguard founder Jack Bogle turned the mutual fund industry on its head more than 30 years ago by thinking of and acting in the interest of the retail investor.
Small Cap Stocks: This Alger Portfolio Was 2018's Top Performing Fund  Investor's Business DailyIn 2018, $2.3 billion Alger Small Cap Focus Fund (AOFAX) blew away rivals that also focus on small cap stocks. In a year when the broad market, measured by ...
The dangers of high mutual fund inflows  LivemintIndian mutual funds have pumped about ₹1.2 trillion into the equity markets in each of the last two years.
Large-cap and Mid-cap Stocks Top Mutual Fund Schemes Are Betting On  MoneylifeEquity mutual funds (MFs) are run by expert stock-pickers.
SEBI tweaks stock weightage norms for equity ETFs, index funds  Moneycontrol.comIn a circular issued to all mutual funds and asset management companies, SEBI said an index used for equity ETFs or index funds should have at least 10 stocks ...
Domestic, global risks to stock markets  BusinessLineThe BSE Sensex is 6 per cent below its peak hit in August 2018. With General Elections looming in four months, and the inevitable unpredictability of what the ...
Multicap funds have the advantage of flexibility  Economic TimesAfter the re-categorisation of mutual funds by market regulator SEBI, many advisors are recommending the multicap fund category to investors. What are ...
3 Best Dimensional Mutual Funds for Strong Gains  Zacks.comBelow we share with you three top-ranked Dimensional mutual funds. Each has earned a Zacks Mutual Fund Rank #1 (Strong Buy).
3 JPMorgan Mutual Funds to Buy Now  Zacks.comBelow we share with you three top-ranked JPMorgan mutual funds. Each has earned a Zacks Mutual Fund Rank #1 (Strong Buy).
This little-known tax plan beats every other ELSS fund; should you invest?  Moneycontrol.comKnow here what is Quant Tax Plan and why it is topping the charts.
Early bets on IT, private banks help these mutual fund managers beat peers  Economic TimesThe year 2018 was tough for most fund managers. But some of them, such as Jinesh Gopani of Axis Mutual Fund, Taher Badshah of Invesco Mutual Fund, ...
Mutual Fund Update: Top 5 stocks that MFs sold  Dalal Street Investment JournalMutual funds are institutional investors, the buying and selling transaction of fund houses happen in huge numbers which also affects the stock prices in some or ...
Gold, mutual funds, equity - where to invest in 2019?  Moneycontrol.comAs we enter 2019, the question on everyone's mind is: can we say goodbye to market volatility that 2018 unleashed upon us? The answer may not be that simple ...
Berko: Do not invest in Chinese stocks, mutual funds  The ColumbianDear Mr. Berko: My wife and I are thinking of investing in Chinese stocks or mutual funds. If we were to buy stocks, we'd invest $10000 each in Alibaba, Noble ...
Year-end special: Multicap schemes didn't shine in 2018, but don't write them off  Economic TimesMulticap mutual fund schemes, like other equity mutual fund categories, had a tough year in 2018.
Sebi issues norms for mutual funds investments in derivatives  Moneycontrol.comCurrently, mutual fund schemes are permitted to undertake transactions in equity derivatives but cannot write options or purchase instruments with embedded ...
Year-end special: Some challenges will continue in 2019, says Jinesh Gopani of Axis Mutual Fund  Economic TimesAxis Mutual Fund is the equity fund house of the year. Axis equity schemes are toppers in almost every equity mutual fund category.
Here are 2018’s best & worst-performing mutual funds  Economic TimesThe performance of equity mutual funds was uninspiring through most of 2018, with the best-performing fund giving just 6 per cent return for the year. Among the ...
What You Owe John Bogle, Iconic American Inventor  ForbesJohn Bogle arguably did as much or more for investors than any Nobel prizewinner, although he never won one. Along with Edison and Ford, Gates and Jobs, ...
It’s time to bet on US equities, say experts  Economic TimesSince the start of the year, US stocks have yielded mixed returns.
Growth Stocks Drive This Fund's Special Outperformance  Investor's Business DailyThanks to a sturdy portfolio of growth stocks, MainStay Large Cap Growth Fund is not only ahead of the market but also in positive territory for the year.
Investors pulled a record $143 billion out of active funds during December's plunge  CNBCAccording to data from Morningstar, actively managed funds experienced outflows of nearly $143 billion in December, their worst month ever.
Slideshow | Flashback 2018: 11 stocks that MFs & FIIs pumped money into, but incurred losses  Moneycontrol.comThere are only a handful of stocks where both mutual funds (MFs) and foreign institutional investors (FIIs) bought into in 2018.
15 smallcaps that may turn midcaps in Amfi’s new mcap review for MFs  Economic TimesNEW DELHI: At least 15 stocks, currently bracketed in the smallcap basket, might soon be elevated as midcaps by mutual fund lobby Amfi when it publishes its ...
When Rules of Thumb Fail  Morningstar.comFaulty Exits Tuesday's column discussed a research paper, “Selling Fast and Buying Slow: Heuristics and Trading Performance of Institutional Investors,” that ...
Sebi brings cybersecurity framework for mutual funds and AMCs  Economic TimesNEW DELHI: Markets regulator Sebi Thursday put in place a robust and stricter cybersecurity framework for mutual funds and asset management companies ...
Net equity mutual fund inflow hits 3-month low in November  Economic TimesEquity mutual fund schemes registered a net inflow of Rs 8,414 crore in November, making it the lowest in three months, mainly due to a volatile market. With this ...
Family finance: Sankaran needs to hike investments and link them to goals  Economic TimesAfter considering expenses, Sankaran should invest the money instead of letting it idle and link it to his goals. His major goals include childs education and ...
The Mutual Fund Show: Should Investors Opt For ETFs Over Active Funds?  BloombergQuintThe heightened market volatility in 2018 took a toll on the performance of large cap schemes as exchange-traded funds—which track an index, a commodity, ...
4 Small-Cap Growth Mutual Funds for 2019  Zacks.comSmall-cap funds that offer good earnings potential could be your best bet amid economic tailwinds and growth projections.
What Fund Managers Get Right  MorningstarInvestment managers typically get their equity purchases right on days of earnings results, but they are less successful at timing when to sell out of a stock.
The Best Mutual Funds to Buy in 2019  The Motley FoolHere are not only 17 mutual funds and ETFs to consider, but also tips on what to look for in great funds.
Should I trade stock mutual funds for CDs?  MoneyRates.comMoving out of stock mutual funds into CDs may seem like a good way to manage risk during a volatile market, but wide swings in asset allocation could make ...
This tiny fund you’ve never heard of was up 22% last year, but it’s got a risky strategy  MarketWatchIt's a long way from Wall Street to Wayzata, Minn. And that distance may have helped a tiny mutual fund in the Upper Midwest post big returns last year, when ...
Founder of financial giant Vanguard, 89, dies  The Business TimesTHE BUSINESS TIMES Companies & Markets - JOHN C Bogle, who founded the Vanguard Group of Investment Cos in 1974 and built it into a giant mutual fund ...
RIL first Indian private firm to post Rs 10,000 crore quarterly profit; 10 takeaways from Q3 earnings  Economic TimesNEW DELHI: Reliance Industries (RIL) on Thursday put up a solid Q3 show by becoming the first Indian private firm to cross Rs 10,000 crore quarterly profit ...
Here's Why Stocks Have Sold Off So Steeply In December  ForbesA TV broadcast of Fed Chairman Jerome Powell announcing interest rate hikes on the floor of the NYSE on Wednesday, December 19, 2018. The rest of the ...
China Trade News Lifts Stocks: Netflix, AmEx, Tesla Lag  Investor's Business DailyHints of China trade progress sent U.S. stocks and global markets higher Friday, but Netflix and Tesla posted heavy losses, hampering early gains.
U.S. stock funds post record December withdrawals: estimate  ReutersNEW YORK (Reuters) - Investors pulled $98 billion from U.S.-based stock funds in December, a calendar-month record that emphasizes the diminishing ...
Sick of Your Oil Stocks Getting Slaughtered? Try This Instead  The Motley Fool CanadaPicking individual stocks in the oil sector has been devastating for many investors. Choose an ETF like BMO Equal Weight Oil Gas Index ETF (TSX:ZEO) instead.
Top 19 for 2019: Stocks that could give double-digit returns in a year  Moneycontrol.comMost experts now feel that India Inc. is on track to register double-digit earnings growth in 2019. If the political environment remains stable, we are on track to hit ...
The Zerodha story: How the Kamath brothers built India's largest retail broker  Moneycontrol.comZerodha started its journey in 2010 with a team of five people. Today, it employs over 1300 people.
Atlassian Stock Reverses Lower Despite Earnings, Revenue Topping Views  Investor's Business DailyAtlassian said Thursday that adjusted fiscal second-quarter earnings were 25 cents a share, nearly doubling from a year earlier, with revenue rising 39% to $299 ...
Stock market: 19 stocks to buy next year  USA TODAYWhat stocks should you buy next year? Here's a list of 19 stocks mutual fund managers say are "buys" in 2019.
Take Buffett’s Advice: 5 Vanguard Funds to Buy  Investorplace.comWarren Buffett believes index funds are the way to go for most investors, making these five 'products' from Vanguard Funds worth owning.
Stock News: Investors Keen on Shares of Southern Company (The) (NYSE:SO) as it Makes Headlines With Moves  The Coin GuildMajor market players are buzzing over Southern Company (The) (NYSE:SO) as their share price hit $46.79 at the end of the most recent trading session.
7 stocks most favoured by mutual funds over last one year  Economic TimesAs the markets hit a speed bump, stocks favoured by mutual funds appear to be safer bets.
John Bogle, Vanguard founder and index pioneer, a 'hero to investors'  The Australian Financial ReviewJohn Bogle, who popularised the low-cost index-based mutual fund as founder of Vanguard Group and insisted that most stock-picking money managers ...
Is your mutual fund buying or selling stocks too much?  LivemintHere are equity mutual fund schemes with the highest turnover.
Mutual funds bet big on these 30 stocks in November; do you own any?  Moneycontrol.comMF industry assets grew to Rs 23.4 lakh crore, on the back of improved inflows into liquid funds and steady equity markets.
Stock Focus: Investors Keen on Agnico Eagle Mines Limited (NYSE:AEM) as it Makes Headlines With Moves  The Coin GuildMajor market players are buzzing over Agnico Eagle Mines Limited (NYSE:AEM) as their share price hit $39.14 at the end of the most recent trading session.
Stock Focus: Investors Keen on Magellan Petroleum Corporation (:TELL) as it Makes Waves With Moves  The Coin GuildMajor market players are buzzing over Magellan Petroleum Corporation (:TELL) as their share price hit $7.86 at the end of the most recent trading session.
Fund managers ready to go shopping after sharp correction in stocks  Moneycontrol.comMutual funds that were holding around 8-10 percent cash level in their equity portfolio are likely to purchase shares of companies in banking and financial ...
Worried You're Never Going to Be Able to Retire?  Kiplinger's Personal FinanceFive common threats to your retirement (and how you can tackle them now).
Why stopping mutual fund SIPs when stock market falls can jeopardise your financial goals  Economic TimesFear has returned to Dalal Street. Caught in a perfect storm of weak macroeconomic numbers, the IL&FS crisis and fear of more defaults, equity markets have ...
Mutual funds' exposure to banks hits 3-month low of Rs 1.88 lakh crore in Sept  Economic TimesMutual funds' holding of banking stocks declined by over Rs 21,600 crore to Rs 1.88 lakh crore in September, driven by the correction in equity markets.
Check out what top five mutual funds bought & sold during October selloff  Economic TimesNEW DELHI: Mutual funds stood resilient as industry's asset base increased to Rs 22.23 lakh crore in October in spite of a heavy correction in the domestic ...
Mutual funds that destroyed most investor wealth in the September selloff  Economic TimesThe recent selloff in the stock market has raised fears of a rush for redemption in mutual funds.​
Five stocks that mutual funds think can outperform  Economic TimesA volatile month gave fund managers a chance to cherry-pick stocks.
Shall I buy the HDFC AMC stock or mutual fund?  LivemintThe HDFC Asset Management Co. Ltd stock closed 65% up on the first day of listing over its IPO price of ₹1,100 per share. Investors who sold on day one, saw ...
When should you sell your mutual fund schemes? - Stocks and equity mutual funds are different  Economic TimesInvesting in an individual stock and equity mutual fund scheme is different. You must look at various parameters like key ratios while investing in a stock. Hence ...
Value focussed MF are cutting their exposure to Indian stocks. What about you?  Moneycontrol.comAs valuations climb, the funds have chosen to stay light on Indian stocks and exposure to bonds and arbitrage has gone up.
New stock ideas boost equity mutual fund portfolios  LivemintIt is imperative for mutual fund houses to beef up their research capabilities, to be able to identify more winning new ideas.
How stocks picked by mutual funds over 2014 to 2017 have performed  Economic TimesWhile the most wanted stocks of 2014 and 2015 have done well, the recent picks have disappointed.
Mutual fund lesson: What should you do in volatile markets?  Moneycontrol.comCost of investing in equities is that it is a volatile asset class- there will be times when your portfolio value will be lower than what you invested.
How your mutual funds played the balancing act during stocks crash  Economic TimesBy Bhavana Acharya The last three months has been a bumpy ride for largecap stocks. The year so far has been unkind to the midcap and smallcap set.
Investing in equity mutual funds versus investing in shares: Which is better?  Economic TimesBy Dhirendra Kumar Hopefully, by now my columns have convinced you that most of your long-term investments should be in equity. The next question to be ...
Are mid and small-cap mutual funds holding too many illiquid stocks?  Economic TimesLiquidity has been scarce in Indian capital markets in recent weeks. Mutual funds have also not been spared the pain, with liquid and money market funds ...
Why your mutual fund earned you less than Nifty in recent market rally  Economic TimesThe more the number of stocks in an index, the weaker is its performance.
Small- and mid-cap mutual funds open doors again, but should you invest?  LivemintL&T Emerging Businesses Fund and DSP Small Cap Fund have allowed *fresh* mutual fund investments, taking advantage of a continued correction in small- ...
Picking the best mutual fund: Are past returns relevant after re-categorisation?  Moneycontrol.comWhile selecting a scheme for investment or while deciding whether to continue with a current investment, a fund's performance track record does play a critical ...
Best mutual funds to invest in India  Times of IndiaFAQs News: Market analyst says that it would be difficult for investors to get high returns in 2018 pointing to the volatility faced by the stock market. The inv.
Mutual fund holdings in IT stocks touch all-time high  Economic TimesMumbai: Fund managers are betting big on the IT sector, on the back of an improving global macro environment, depreciating rupee and rise in IT spends.
Is it a good time to invest in small-cap mutual fund schemes?  Economic TimesDespite the slide in the Nifty Smallcap100 index, fund houses seem to be placing faith in small-cap funds again. Should investors take the cue?
5 strategies for investing in mutual fund in the current market to get good returns  Moneycontrol.comMutual fund investing is all about ascertaining your goals and setting out to reach them.
These 18 consistent mutual funds may help you to beat stock market volatility  Economic TimesMany equity mutual fund advisors abhor volatility in the stock market. They are always searching for ways to tackle this beast which gives them sleepless nights.
Why HDFC Bank stock is among the top picks of mutual funds  Business TodayPrivate sector lender HDFC Bank, the third-largest Indian firm by market capitalisation, is among the favourite stocks in the portfolios of mutual funds. Despite ...
List of best mutual fund portfolios as per your risk appetite  Moneycontrol.comYou can build a portfolio of mutual fund schemes based on your risk profile.
Do not make these 7 mistakes while investing in mutual funds  Moneycontrol.comNever forget that you are investing because you have to achieve your financial goals. Investing without a goal is akin to travelling without a destination.
Top stocks bought and sold by mutual funds in June 2018  IndiainfolineInvestors should focus on longevity to create wealth. We advise investors to stay invested in those stocks whose growth story is still intact.
Mutual Funds For First Time Manage More Money In Stocks Than Insurers  BloombergQuintMutual funds for the first time manage more money in equities than insurers as the last stock rout erased the gap that started narrowing after demonetisation.
Some international funds are giving around 40% returns. Should you invest?  Economic TimesInternational mutual funds are topping the return charts. The category has returned around 20 per cent in one year. Should retail investors bet on these schemes ...
How to Invest in Mutual Funds  The Motley FoolIf you want to understand how to pick the right mutual fund for you, you've come to the right place. In the guide below, I've put together all the major pieces of ...
Fund managers' bets: Top 10 large, mid and small-cap stocks that MFs bought in October  Moneycontrol.comMF industry assets grew to Rs 22.2 lakh crore on the back of improved inflows into equity-oriented and liquid funds.
Bleeding mutual funds: Should you go back to good old fixed deposits?  Moneycontrol.comAre you worried about the losses on your investments in mutual fund schemes? You are not alone. There are many investors who dumped their good old fixed ...
Investing in stocks needs deep understanding of markets  LivemintDirect investing into individual stocks requires deep understanding of the markets and continuous involvement into investing.
How to build your mutual fund portfolio from scratch  Moneycontrol.comYou need to know that there is no such thing as a "perfect mutual fund portfolio". There can be numerous reasonably good portfolios, and there's no ...
Mutual fund managers bought & sold these 20 stocks in May  Moneycontrol.comRelative valuations are attractive and around average, but midcap valuations are still looking stretched despite the recent drawdown, Morgan Stanley said in a ...
Should you shift from large-cap mutual funds to index funds?  Economic TimesThe index fund category of mutual fund schemes is slowly gaining traction among investors. The fortunes of index funds are changing as not only are they being ...
Top 10 large, mid and smallcap stocks which fund managers bought & sold in September  Moneycontrol.comFears of a liquidity crunch following the IL&FS crisis hit the mutual fund industry in September. Cash plans, or liquid funds, were the worst hit.
HDFC AMC, Reliance Nippon stocks fall over 9% after Sebi caps expense ratio of mutual funds  Business TodayThe stocks of asset management companies (AMCs) fell in trade today on fears of lower revenues after market regulator Sebi capped expense ratio for mutual ...
Investing in mutual funds? Diversify to reduce risks and enhance returns  Moneycontrol.comIn the worst of the times for stock markets, individuals invested across the asset classes are less hit as compared to investors betting all their money on stocks.
How much do mutual fund managers invest in their own schemes?  Moneycontrol.comEver since SEBI mandated mutual fund houses to disclose how much fund managers, directors of the asset management company and other key employees ...

Dont Fight The Fed

One of the great truisms of Wall Street is "Don't... Read More

Momentum

One of the basic laws of physics states that a... Read More

Selling

The stock market has been going up for more than... Read More

Online Investing & Online Stock & Share Trading: Difficulty in Taking Stop Losses in the Market

This is an extract of an article which was first... Read More

DIY Portfolio Management

Exchange Traded Funds (ETFs) are growing. Investors are choosing low... Read More

Risk Control

Everything you invest in has risk so you want to... Read More

How Eating Bitumen Made Me a Better Trader

Trading is a fascinating activity.There are so many layers to... Read More

Defining a Long-Term Investment in the Stock Market

For some "long term" would mean holding a stock position... Read More

Advisory News Letters

Several times each month I am solicited by various market... Read More

Managing Investing and Stock Market Risks

Reduce your investing and stock market risks by:Setting your sights... Read More

Protect Your 401K

Checked your 401K lately? Going back to about a year... Read More

Overvalued & Underbought

With all the bad news that has been dumped upon... Read More

What is the Most Important Indicator of All?

Most stock market traders have a favorite technical indicator.The one... Read More

No Load Mutual Funds: Investment Hype vs. Investment Help

With the internet such a huge part of our daily... Read More

Long Term Investing

In his wonderful book, 'Multiple Streams of Income', best selling... Read More

Dividend Paying Stocks

I would like to share with the reader an article... Read More

Forces that Move Stock Prices

Among the largest forces that affect stock prices are inflation,... Read More

Stock Loans

Hedge current portfolio positions and gain access to capital resources... Read More

Where Is The Beef?

Where is the beef? Or maybe it should be where... Read More

Investment Capital Gains

Have you bought any mutual funds this year or late... Read More

The Holy Grail (of Investment)

Every year I go to the Money Show in Orlando,... Read More

Is Your Garage Full Of Junk?

I have a 2-car garage. There are nice shelves on... Read More

How To Be A Winner

Everyone who invests in the stock market wants to be... Read More

Performance Funds

Mutual funds are doing more and more to discourage investors... Read More

Acapulco - The Stock Market Dives

There is a famous cliff on the ocean in Acapulco... Read More