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Investments is a field so unique that even a person without formal education can benefit from. I believe mathematics and modeling of financial markets using data techniques can open a whole new path to optimal investments. It is a highly interdisciplinary field that requires concepts from deep understanding of financial markets, macroeconomics, financial account, mathematical modelling, data analysis, research and many more. Its a great learning for everyone!

Table of contents

  1. Why Invest?
  2. Where to Invest?
  3. Learning Resources
    1. Investment Philosophies and Valuation
  4. Investment Strategies
  5. Suggestion for Beginners
  6. Some Useful Tools

Why Invest?

Studies have proven that savings in one form or other have benefitted in difficult times. If you feel you are already set for that, might be you already have investments! The other perpective is wealth generation by benefitting from contantly beating the inflation and compounding effect. It’s unimaginable for a begginer to quantify how much can compounding affect your wealth!

Where to Invest?

Let me divide the audience into two segments. One who are actively willing to optimize their strategy (active investors) and the rest (passive investors). Further more, Investments always needs a time horizon and a rationale.

The most popular financial asset can be equities. Talking about Indian markets, the index has given a healthy returns of about 12% consistently. If you do the math, you are trippling your wealth every 10 years!

Active investors are those unsatisfied souls who want to beat the markets. You may think why take extra efforts, time, and risk to manage a portfolio yourself but an increase in 3% return from the index can 4 times your wealth intead of 3! The compounding plays a bigger role when the time horizon is even bigger.

I would recommend everyone to go through first few learning resources and continue learning if you are interested. Later on, I will list down few strategies which in my opinion have benefitted most retail investors and is statistically beneficial.

Learning Resources

Start learning basic fundamental and technical analysis.

Zerodha varsity readings and playlists is a great place to start!

Investment Philosophies and Valuation

I recommend going through these courses from Prof. Aswath Damodaran.

Note: This roadmap is not complete and will be updated. Please note that one might find better courses and resources than the ones mentioned above. If you have any suggestions, feel free to open an issue here.

Investment Strategies

Strategies with increasing risk and returns.

  1. SIPs in Index Funds: The most popular strategy for passive. Expect a return of 12% in long term.

  2. SIPs in actively managed midcap and small cap nutual funds: Expect a return of 16% in long term. Usually small caps earn more than midcaps but are more volatile. You can expect 20%+ returns in long term.

  3. Lumpsum in Mutual Funds

  4. Equity portfolio with SIPs

  5. Equity portfolio with lumpsum investments in Mutual Funds

  6. Equity portfolio with Futures & Options (FnO)

  7. FnO portfolio with leveraged positions

Suggestion for Beginners

Start with Paper trading after going through zerodha varsity and Investment Philosophies course. One great platform for paper trading is FrontPage.

Once you are ready, get started with opening your demat account with a good broker. I would recommend going with Dhan or Zerodha Kite. Dhan is preferable for those more interested in trading as they have their UI and features accordingly. Also Dhan doesn’t charge Acount maintenance charges.

For serious investors, go ahead strait with Zerodha as you might not get a cleaner and smoother experience on this planet with any other broker.

For those interested in mutual funds, I would recommend to go with a mutual fund advisor, meet them personally and plan your future investments. It’s very important to invest for the right reasons and with the right strategy with good time horizon in mind which a financial professional can guide you better than any youtuber.

If you have any questions, feel free to reach out to me at:

shreyaskali@gmail.com

Some Useful Tools