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

Business Mindset

23 Jun 202410:56

Summary

TLDRThe 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.

Outlines

00:00

😀 Stock Market Misconceptions and Long-Term Investment

The first paragraph discusses common misconceptions about stock market investing, particularly the belief that daily trading can lead to quick riches. It emphasizes that the true nature of the stock market is to generate wealth over the long term. The narrative introduces three friends, Sonu, Monu, and Chintu, who start their investment journey together. Despite all choosing to invest in SIPs, they each have different approaches to investing. Sonu, from a typical family with no business background, believes in fixed deposits and RDs, avoiding any market risks. Monu, from a middle-class family, seeks safe and trending investment methods, eventually choosing SIP in index funds, which even investment gurus like Warren Buffett recommend. Chintu, despite having no market knowledge, decides to invest in SIPs and index funds but also looks for opportunities to invest more during market downturns for extra returns.

05:02

📈 Market Indicators and Investment Strategies

The second paragraph delves into the use of market indicators to make informed investment decisions. It introduces three indicators used by Chintu to determine the best time to invest. The first is the Relative Strength Index (RSI), which helps assess market trends and is used to identify overvalued or undervalued market conditions. The second is the Warren Buffett Indicator, a formula that compares market capitalization to GDP to determine market value. According to Buffett, an indicator value below 64 suggests an undervalued market, while above 119 indicates an overvalued market. The third is the P/E Ratio, which reflects market sentiment and mood. A high P/E ratio suggests investors are overly optimistic, while a low ratio indicates caution. Chintu also checks the Nifty P/E ratio to decide whether it's a good time to invest more. The paragraph advises against daily monitoring of the market to avoid becoming a short-term trader and emphasizes long-term investment strategies.

10:02

💰 Achieving Extra Returns Through Smart Investing

The final paragraph wraps up the video script by highlighting how Chintu, using the strategies and indicators discussed, achieves a return of 15.1% by smart investing. It encourages viewers to adopt these methods to get an extra 2-3% return on their investments. The video ends with a call to action for viewers who haven't started their SIP to do so and offers a link to open a free account in the description box. It concludes by asking viewers to like, share, and subscribe for more valuable content, emphasizing the importance of the information provided in the video.

Mindmap

Keywords

💡Social Media

Social media refers to digital platforms that enable users to create and share content or participate in social networking. In the video's context, it is mentioned as a common place where people often prioritize superficial knowledge over deep understanding, which is a metaphor for the approach some beginners take to stock trading.

💡Stock Market

The stock market is a platform where shares of publicly traded companies are issued and traded. The video discusses how new traders often start with daily trading in the stock market, aiming for quick profits, which contrasts with the long-term investment approach that is generally advised.

💡Long-Term Investment

Long-term investment involves holding assets for an extended period to achieve financial returns over time. The video emphasizes the importance of long-term investment in the stock market, suggesting that it is a more reliable way to generate wealth compared to short-term trading.

💡SIP (Systematic Investment Plan)

A SIP is a method of investing in which a fixed amount is invested in a mutual fund or stock at regular intervals. The video mentions SIP as a strategy used by one of the characters, contributing to his long-term financial growth over 25 years.

💡Index Fund

An index fund is a type of mutual fund with a portfolio constructed to match or track the components of a financial market index. The video script highlights index funds as a recommended investment option by renowned investors like Warren Buffett due to their historical performance.

💡Relative Strength Index (RSI)

RSI is a momentum oscillator that measures the speed and change of price movements. In the video, RSI is used by one of the characters as an indicator to determine when the market is overvalued or undervalued, assisting in making investment decisions.

💡Warren Buffett Indicator

The Warren Buffett Indicator is a valuation measure that compares the total market capitalization of all publicly traded stocks to a country's GDP. The video script describes it as a tool used by the character to assess market valuation and decide when to invest.

💡P/E Ratio (Price-to-Earnings Ratio)

The P/E ratio is a valuation ratio calculated by dividing the market value per share by the earnings per share. In the video, the character uses the P/E ratio to evaluate whether the market is cheap or expensive, guiding his investment timing.

💡Investment Discipline

Investment discipline refers to the practice of following a consistent strategy or approach to investing, regardless of market conditions. The video illustrates this concept through the character who religiously follows his SIP for 25 years, leading to significant returns.

💡Market Sentiment

Market sentiment reflects the overall attitude and sentiment of investors toward the market. In the video, it is used as a tool to gauge when the market might be undervalued or overvalued, with the character investing when sentiment is low, indicating potential undervaluation.

💡Extraordinary Returns

Extraordinary returns refer to investment profits that significantly exceed the average market returns. The video's theme revolves around achieving such returns through smart investment strategies, as demonstrated by the character who uses various indicators to time his investments.

Highlights

Social media often promotes the idea that beginners should start their careers with daily trading in the stock market.

The nature of the stock market is to make money in the long term, contrary to the common belief of quick gains.

Long-term investment advice is widely recommended by well-known investors.

The stock market is famously known to transfer money from short-term investors to long-term investors.

Systematic Investment Plans (SIPs) are considered the best method for long-term investment.

SIPs have certain limitations that can result in limited returns.

Some well-known investors are aware of secret tricks to earn extra returns from SIPs.

The story of three friends, Sonu, Monu, and Chintu, who start their financial journey together, is highlighted.

Sonu, from a typical family with no business background, believes in FDs and RDs as safe investment options.

Monu, from a middle-class family, looks for the safest and trending investment method and chooses SIP in index funds.

Monu starts monthly SIP contributions and follows a disciplined approach for the next 25 years, achieving significant returns.

Chintu, despite being new to the job and market, believes in earning extra returns from the market.

Chintu invests in SIP and index funds but also looks for market opportunities during downturns for extra returns.

Chintu uses three tricks or indicators to determine the best time to invest in the market.

The first trick is the Relative Strength Index (RSI), which helps in understanding market trends.

The second trick is the Warren Buffett Indicator, which compares market cap to GDP to determine market valuation.

The third trick is the P/E Ratio, which reflects market sentiments and mood.

Chintu checks the Nifty P/E value to decide whether it's a good time to invest more or stick to regular SIPs.

The video emphasizes the importance of long-term investment and avoiding daily market analysis to prevent shifting to short-term trading.

The video concludes by encouraging viewers to start their SIPs if they haven't already and to use the described method for potentially higher returns.