Don't Invest in SIP Instead use this Method (Hindi)| सिप करना बंद करो ?| How to be Rich Share Market

Summary

The video script discusses the common misconceptions about stock market investments, emphasizing the importance of long-term strategies over short-term gains. It narrates the stories of three friends with different approaches to investing, highlighting the benefits of SIP in index funds and the use of specific indicators like the Relative Strength Index (RSI), Warren Buffett Indicator, and P/E Ratio to make informed investment decisions. The script advises against frequent market monitoring to prevent shifting from long-term investment to short-term trading and encourages starting SIPs for better financial outcomes.

Takeaways

• 😀 New investors often start with daily trading in the stock market, thinking they will make quick profits, but the nature of the stock market is to reward long-term investments.
• 🤔 The common myth in the stock market is that it takes money from short-term investors and gives it to long-term investors.
• 🏦 SIP (Systematic Investment Plan) is considered the best method for long-term investment, but it has its limitations and may offer limited returns.
• 🔢 The script introduces three friends, Sonu, Monu, and Chintu, who start their investment journey together but choose different methods of investing despite having no prior knowledge.
• 👨‍👧‍👦 Sonu, from a typical family with no business background, believes in saving and investing only in FDs (Fixed Deposits) or RDs (Recurring Deposits), aiming for limited returns.
• 🤝 Monu, from a middle-class family, searches for the safest and trending investment method, eventually choosing SIP in index funds, which even experts like Warren Buffett recommend.
• 💼 Monu starts investing in SIP for his retirement account with discipline and consistency, aiming to grow his money at an approximate rate of 12% over 25 years.
• 🧐 Chintu, despite his lack of market knowledge, believes in earning extra returns from his investments and uses three indicators to decide when to invest in the market.
• 📈 The first indicator Chintu uses is the Relative Strength Index (RSI) to understand the market trend and identify overvalued or undervalued market conditions.
• 📊 The second method Chintu uses is the Buffett Indicator, a formula involving market cap and GDP, to determine if the market is undervalued or overvalued.
• 📉 The third method involves using the P/E ratio of the Nifty index to gauge market sentiment and decide the best time for investment based on whether the market is considered cheap or expensive.
• 🚫 The script warns against applying these methods daily as it may lead to false signals and shift one's focus from long-term investing to short-term trading.

Q & A

Why do beginners in the stock market often start with daily trading?

Beginners often start with daily trading because they believe they can make quick profits by trading daily or monthly, aiming to accumulate wealth rapidly. However, the nature of the stock market is to provide returns in the long term.

What is the popular belief about the stock market's behavior towards short-term and long-term investors?

The popular belief is that the stock market takes money from short-term investors and gives it to long-term investors, favoring those who hold their investments for an extended period.

What is the best method for long-term investment according to the script?

The best method for long-term investment mentioned in the script is SIP (Systematic Investment Plan), which is a disciplined approach to investing a fixed amount at regular intervals.

What are the limitations of SIP that might result in limited returns?

SIP has certain limitations, such as a fixed investment amount and timing, which might not always align with market conditions, potentially leading to limited returns.

What are the 'secret tricks' that some investors use to earn extra returns from SIP investments?

The 'secret tricks' refer to strategies employed by some investors to optimize their SIP investments for extra returns, which are known only to seasoned investors.

Who are Sonu, Monu, and Chintu, and how are they related to the investment story in the script?

Sonu, Monu, and Chintu are three friends who have always been together since childhood. They started their financial journey together and chose different investment methods, but all utilized SIP in some way.

What investment approach does Sonu take, and why?

Sonu comes from a typical family that believes in saving money rather than investing. He chooses the path of FD (Fixed Deposit) or RD (Recurring Deposit), aiming for a limited return to meet his expectations without taking risks.

How does Monu's investment strategy differ from Sonu's, and what does he focus on?

Monu, unlike Sonu, comes from a middle-class family and looks for the safest and most trending investment method. He finds a way to invest that has lower risk and good returns, such as investing in Index Funds, which is recommended by experts like Warren Buffett.

What is the investment strategy that Chintu follows, and how does he use market downturns?

Chintu invests in Index Funds like Monu but also looks for opportunities in the market. When the market is down, he invests extra amounts to take advantage of the situation and earn extra returns without panic.

What are the three indicators or tricks that Chintu uses to decide the best time for investment?

Chintu uses three indicators: the Relative Strength Index (RSI) to understand market trends, the Warren Buffett Indicator to assess market valuation, and the P/E Ratio of the Nifty 50 to determine if the market is cheap or expensive.

How does Chintu ensure that he is not misled by daily market fluctuations and maintains a long-term investment perspective?

Chintu avoids checking the market and his portfolio constantly to prevent short-term fluctuations from affecting his long-term investment strategy. He also ensures that he is a long-term investor and not a trader by not getting swayed by daily market movements.

What is the final return that Chintu achieves by using these investment strategies, and how does it compare to his friends?

Chintu achieves a return of 15.1% by using these strategies, outperforming his friends Sonu and Monu, who followed more conventional investment approaches.

What advice does the script give to those who want to start their SIP but haven't yet, and where can they find more information?

The script advises those who haven't started their SIP to do so immediately and provides a link to open a free D-mat account in the description box and the first comment for further information.