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Equity Investment in India - All you need to know

  • 1
    Direct investment in Stocks
    For greater control, flexibility and enhanced
    returns. Add 10 strong companies with
    attractive upside potential.
  • 2
    Invest Lumpsum in Best Funds
    To reduce risk through diversification and
    enhance returns. Unique selection criteria
    based on strong portfolio, consistent
    performance and attractive upside potential.
  • 3
    SIP in Funds the Sahi Way
    Invest monthly savings in select funds with
    diverse styles of investing (Value, Quality,
    Momentum, Small-cap etc.) to ensure
    portfolio growth under different market situations.

Manage your Equity Portfolio like a Pro

  • 1
    Know what you invest in
    See easy-to-understand 10-year Stock X-RAY, Fund Reports and Analyst Notes to understand the rationale for recommendations. Use guides, blogs and videos to become a savvy investor
  • 2
    Rotate stocks only when required
    With PRO you stay process-oriented and research-driven and rotate stocks only when required. Benefit from new opportunities and exit less attractive ones.
  • 3
    Simple to Execute
    See everything in one place, take decisions and then execute. Stocks transactions and portfolio updating now easy with smallcase gateway (8 brokers are covered) available on our site.

How it works

How it works

2,25,000+
Registered Users
6,000+
Paid Subscribers

Proof of Performance


Disclaimer: The Proof of Performance seen here is based on the recommendations for stocks only, and
includes all stocks covered by MoneyWorks4me.
Our focus is on delivering absolute CAGR returns over the long term while managing risk at a level that ensures clients stay invested and benefits from it.
What does this mean? What does this mean?

What Customers Say


"Mutual Funds Sahi Hai" - is probably the first investment related advice or quote any beginner investor in India would have heard. But with hundreds of Mutual Fund options available to the modern-day investor, how do you know which one is the right investment?

Success in investing in equity through all the routes - direct stock, mutual and index funds - depends on the capability of your advisor. A majority of this advice is limited to Mutual Funds.

However, Mutual Funds are nothing but a portfolio of stocks; so without real understanding of stocks advice about Mutual Funds is rather shallow as it tends to rely solely on fund past performance and fund manager reputation.

Another driver for Mutual Funds as the choice for small investors was that it was easier to invest small monthly sums (SIP) in MF which could not be done with stocks. However, thanks to modern tech wizardry and evolution in the fintech domain, it is now possible to make an SIP in a portfolio of stocks with ease once you have selected your portfolio of stocks.

So today a beginner, even with a small amount to invest,has the options to invest in stocks, mutual funds and index funds.

And they should focus on all these three channels because of the unique advantages each has to offer.

Investing in Mutual funds or stocks has their own unique advantages and risks if not managed properly. The main argument against small investors investing in stocks is that it is risky and requires skills and time that they don’t have. However, investing in mutual funds is not as easy as it is made out to be. Investors big and small require investment advice to grow their money through equity investing.

Mutual funds is a portfolio of stocks managed by a fund manager. Similarly when you think of investing in stocks, think of a portfolio not individual stocks built with support of research and advice. When seen this way investing in stocks will not be seen as more risky.

Mutual Funds and Stocks both have a place in your portfolio to achieve your goals of growing your money.

Investing in individual stocks gives you a higher level of control over your portfolio, where you can choose your allocation based on a specific industry and quickly exit once you earn a sizable profit. Since you are in control, there are no additional overheads like fund manager fees. Finally, your decisions are not impacted by external factors as is the case in a Mutual Fund, eg redemption pressure, large inflows, fund manager exit etc.
Mutual funds help you diversify easily with a very small investment. A typical MF holds around 50 stocks in its portfolio, thus presenting lesser risks if one stock was to perform poorly. A dedicated fund manager who understands the Indian markets actively monitors and oversees the fund so that inexperienced investors don't have to sweat it. MFs make it easy for beginner investors in India to follow a disciplined way of investing through.
An Index Fund is a mutual fund where the portfolio of stocks is not actively selected by a fund manager, but is a replica of the Index eg the Nifty 50 Index Funds’ portfolio matches that of Nifty 50. Mutual funds are called actively managed funds while investing in index funds is called Passive investing. The advantage of an Index fund is that its portfolio is predictable and it comes at a lower cost. So you get the benefit of diversification at a lower cost. However, the decision to invest in Index funds is similar to any mutual fund.
There are 3 critical things you should be aware of when short-listing a Mutual Fund -

Quality of the Portfolio:

Remember when you buy a equity mutual fund you are buying a portfolio of stocks selected by the Fund Manager. Knowing the quality of the fund’s portfolio is important when choosing a fund.

There are a number of techniques that fund managers use to make their offerings appear lucrative. In the race to stand out amongst its peers in terms of total returns, a fund might be holding comparatively riskier stocks based on recent returns.

Alternatively, a fund manager may mirror the benchmark index to avoid risks and charge a premium in the name of mutual fund charges - charges you could have avoided had you directly invested in an index fund.

It is hence important to understand the quality of a portfolio's contents before investing in a MF.

Consistency of returns:

As an investor, you should be looking at a fund capable of earning consistent returns that compounds at a rate reasonably higher than safer investments like FD. You would also like to avoid funds whose returns wildly swings from very high to low/very low.

Upside Potential:

Once you shortlist a mutual fund, you need to know whether it is the right time to buy it – particularly if you are investing a sizable sum of money. For this, you need to know the upside potential of the fund and what the likely returns are that one can realistically expect.

Here's a video that demonstrates how MoneyWorks4Me can help you take better decisions while investing in Mutual Funds:

Mutual funds come with the risk of investing in stocks. Fund Managers manage a fund based on the mandate or what the fund declares it will to do or not to do eg invest in certain types of stocks etc. To that extent investors are aware that there are risks and some more than others eg small cap fund versus a large cap fund. However, there are risks of under performance of your investment in mutual funds because of the way you invest in them.

Mutual Funds are sold mostly based on past performance. A fund may be a top performer today because prices of stocks in its portfolio have already gone up. This makes it difficult for the fund to deliver returns again in the coming years since the new money is invested at increased prices.

The second reason for under-performance is that in addition to a particular style of investing not performing in a certain periods you are still incurring a 1-2.25% cost towards fund management fees.

Any individual interested in investing in mutual funds will need a PAN card, bank account, and undergo a KYC verification.

The KYC can be done using three methods; online, Aadhaar based biometric authentication, or offline.

A list of documents will have to be produced during the time of the KYC application. They are:

  1. Recent passport size photograph
  2. ID proof (Aadhaar, PAN card, etc)
  3. Address proof (license, ration card, etc)
  4. A copy of these documents and the KYC application form must be signed by a gazetted officer before being submitted.

Submission of the KYC can be done through a host of websites:

Once the KYC is done, the mutual fund form has to be filled out depending on the type of scheme.

  • Invest in 3-4 mutual funds that have diverse investing styles, such as Value, Momentum, Quality and Small Caps.
  • Invest a large amount when a fund's upside potential is greater than 8%
  • Can't decide between two similar style funds? Choose the one with a higher quality portfolio and consistent performance.
  • Hold on to your funds for as long as the upside potential is above FD interest rates.
The advantages of investing directly in stocks, over a 100% MF portfolio are:

Higher control of your investment:

You can decide what company stock to buy, when to buy/sell & how much.

Lower cost:

Investing in stocks directly incurs only a small brokerage cost which is much lower than the expense ratio associated with Mutual Funds
Anyone interested in investing in stocks must have a trading account and a DEMAT account. One can open a trading account with the help of a brokerage firm/broker. The account enables you to buy and sell shares on a stock exchange. One has to be KYC compliant to open a trading account. Next, the DEMAT account allows the investor to hold the securities bought on the exchange.

In order to open a DEMAT account, an individual needs:

A bank account

The bank account has to be linked to your trading/DEMAT account to offer ease in buying and selling transactions.

Broker

The investor would have to open a DEMAT account with a SEBI registered broker. The broker will facilitate the buying and selling of stocks between investors and companies.

Aadhaar card

Aadhaar card, which provides the unique identity number of the investor, as a document of authentication for Indian investors.

PAN card

A government issued PAN card is a must to carry financial transactions in India. This is for the benefit of tax and regulating bodies.

Bank statement & Personalised cheque

Your bank account statement and personalised cheque are to be submitted to open a DEMAT account. This is done for the sake of maintaining records and authentication of the bank account holder.
  1. Moneyworks4Me recommends that you invest only in quality companies when they are available at reasonable prices.
  2. Only when the upside potential for a particular share is higher than FD/8%
  3. Hold on to a stock as long as the company continues to perform well and let compounding do its magic. Only sell a company's shares when performance has taken a hit or onset of governance issues or when you observe prices have risen so high, that the upside potential is very low.

Frequently Asked Questions

Invest only those funds that are available for atleast 3 years and more. Our expected holding period will be average 3 years for stocks and mutual funds.
It is upto you whether you want all stocks or all Mutual funds. We recommend splitting savings equally between stocks and mutual funds for those who haven’t made a choice
We will recommend atleast 10 stocks and atleast 2 schemes for mutual funds.
We recommend splitting equally between recommended stocks. If you’re investing Rs. 5 Lakhs, and there are 10 recommendations, invest Rs. 50K in each stock.
We will help you split your investment amount and quantity for easy transaction. We have integrated our website with broker's. You can choose and place order on respective broker site. Later add the transaction in our portfolio manager
As of now we do not have interface to buy funds directly. You can choose to buy funds from respective AMC website or your broker.
Yes. Up to 5 Lac You can select all stocks in BUY and on next screen enter fresh amount you wish to invest. We will distribute it for you so that you can execute on your broker's website. Once your portfolio exceed 5 L and you feel to be comfortable Investing in Stocks, you may upgrade to Superstars solution.
After our SELL call, you can select the stock in SELL and press Sell Now tab to place order. Here you need to enter your exact quantity from portfolio manager. We will place the order on broker's website on your behalf.
Puchho Befikar
SEBI Registered: Investment Adviser - INA000013323
Research Analyst - INH000000719

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