Newbie looking for some valuable advice

Hi everyone,

Luckily I came across this much valuable forum in a Google search. I am 30+ and starting with equity investment now with my wife. For starters I am looking to buy 100 shares of ITC and hold it while adding to it. No interest in frequent trading at all.
We make around 80k/month
Present liability include a home loan, rent and some yrly LIC payment(not liability bt fixed expense)
We have an emergency fund, mediclaim and am getting a term insurance this month.
Would appreciate if anyone can point me to right direction with this approach to equity investment. Our major goal is to pay that loan first and thats why FD is our first choice saving option, stocks we are just starting to save for future plans with capital appreciation.
Appreciate all and any insight.

Congratulations @Raj_Nair for taking the first step towards your financial independence. My suggestion is that, you may want revisit the LIC payment, unless it’s term insurance and use it for SIP or SEP. To start you can start with SIP in good funds or you can also look at zerodha smallcase. Good luck.


Hey, thanks for the reply. That one is a pension plan, as i have already closed 3 of the 4 running LIC plans in my name this year, that one is needed to be continued. It given as collateral for my wife’s education loan(which is yet to be confirmed after 6 months, talk about easy loans in India). We also have a very minor SIP running in SBI small cap fund. As suggested I am planning on starting a SIP in index fund as well. NPS is another one on my scheme of things.

Am newbie like you hence you may ignore my view.
Instead of putting SIP type money in one stock (ITC or any one in that matter), I suggest you to have SIP on ETF. Learn about ETF on VP and do some experiment before going on long term sip.

1 Like


I have no advice to give but a distillation of my experience with investing in India ~ 28 years starting as an ordinary middle class grad with some monthly savings, now investing full time…

First let’s define an investor, from Ben Graham - Investment operation is one, which after thorough analysis, promises safety of principal and an adequate return. Every else is speculation.

  1. The more disciplined you are in adhering to the above definition, the wealthier you are likely to be.

  2. Many agree that compounding is the eighth wonder but few have the patience to follow it through. Compounding works over time, not at a point in time. So there are no “Eureka” type Archimedes moments. It’s a slow dull process, sometimes up and most of the times down. You are 30 and say you compound till 80 at 11% (what Nifty gives), you will end up about 185 times. My observation is that not many people have the understanding or the patience. Fortunately they do not require intelligence (so folks like me are spared) but temperament. Those who get that make it.

  3. People have high expectations and get disappointed, because on average they think they are better than average. Worse, research (Dunning Kruger effect) suggests that the incompetent are likely to overestimate their competence than the competent. Meaning, if you don’t know what you don’t know, you are more likely to think you are far better than you actually are!!! There is no reason to believe that one is better than average. If so, then one should not expect returns better than the market (11% Nifty so far in the long haul). But speak to an “investor” and he will laugh it off. The expectation is higher and keeping such high expectations and missing them leads to more errors - like trying to meet a high run rate in the last overs leads to more chances of misses, but an investor will be unable to help himself.

  4. Few investors measure their returns on their entire wealth (Assets - Liabilities), they measure it on a portion of their portfolio giving a spurious indication of its growth (or decline).

  5. Most investors say how much they made, not how much they lost. This gives a false feeling that a tortoise like investor is losing out giving rise to needless feelings of envy. It is not a social norm to talk about our losses, unless they become too apparent. For eg people talk of multi baggers without talking about the time horizon or %age of portfolio invested. If someone buys 1 share of every listed stock, he is sure to have the most multibaggers with potentially -ve returns!

  6. Investing is a profession where it is most difficult to separate skill and luck. Most folks get mesmerized by recent great performance without knowing how much each of skill and luck contributed. The only way to separate (atleast for me) is to first get into a lifelong irrevocable contract with investment principles that you think will generate wealth, and measure returns against them over a long time. My investment principles follow from The Intelligent Investor by Ben Graham and marginally adjusted here or there in action. Many investors change their investing principles along the way because they are unsure, find their new ones, not working, lose confidence, self esteem and carry psychological scars.

  7. Finally, I have discovered that there are very very few “investors” meeting Ben’s definition above. I used to wonder why, but over time I realized it’s better to have a speculator on the other side of your trade, whether you a buyer or a seller.

I hope my experience helps you become a better investor. You have a long long ride and I wish you all the best.


Now this here is the kind of motivation/advice one can always look forward to from person of experience. Thank you for the kind words and taking out the time. Only time will tell how much return we make but ofcs along the way if we can assist even one person to become better would be great. Thanks again, I would love to be the Investor Ben Graham expect us to be.

Hi Raj,

first of all great to see that you have taken investing seriously… My few inputs

  1. First thing you should start with is the capital allocation… what % of your wealth should be in safe funds, Equity and debt funds. IMO, you should put money that you are completely ok to loose in equity in case something goes wrong

  2. Unless, you understand the market well, I would advice you to start with Index funds and invest regularly. That is always a good start to start understanding how markets behave and give you upside with limited risk.

  3. Find out your edge in the market. When you think of a company always think of what you know more than the market which is not priced in already and why it should outperform. Your edge can come in specific vertical knowledge, your research skills, your mentality, reading charts etc. Don’t just buy a company because someone said its a good stock or its a very well known name but share is cheap… Its cheap for a reason.

  4. Corporate governance: Remember India as a market has one of the worst corporate governance. Many many promoters just take out money in every possible form the company. If you ever go in Small cap, Mid cap, always be very careful of the quality of promoter and corporate governance.

  5. Investing is the easiest thing to do but toughest thing to do well… It needs a lot of hard work, study and understanding. It can be worst that a full time job and you are competing with people with insider information, management access and army of analysts… Always double think why you want to do it on your own

  6. Capital preservation: During a bull run, everyone will make money whatever you are sitting on. Always be careful of not loosing your capital… If you can go through phases of consolidation or bear market without a major loss, you will be able to make a lot of money… don’t try to stretch yourself for extra returns as it always comes with extra risk… make sure you reduce the risk you are taking, returns will take care of itself in time…

Best luck with your investments and hope you make great money!!