Thursday, April 21, 2011

Risk Marries Growth.

Investment strategy reviews:

- Value Investing: "I won't buy unless the stock is selling for less than it is worth."
- Growth Investing: "I'm willing to take some risks for portfolio growth."
- Income Investing: "This money has to last a long time, I'm playing it safe."
- Mutual Fund Investing: "I want professional expertise guiding my portfolio."
- Index Investing (Index Funds and ETFs): "I'll let the market do the work for me."
- Momentum Investing: "I want to own hot stocks until they cool off."
- Market Timing: "Ride the Bull and hide from the Bear."
- Day Trading & Technical Analysis: "I have no fear of risk; I will take big chances for big gains."

Investors are constantly trying to find tomorrow's strongest stocks. They look for companies in the early stages of their growth cycle that are already showing signs of dominance. When they find a promising stock, they buy it even if it has already experienced rapid price appreciation in the hopes of riding the wave as the company grows and attracts more and more investors. There isn't a lot of analysis involved in growth investing; it is a criteria based strategy. When I say criteria based, I mean Growth Investors are much more concerned with whether a company is exhibiting behavior that suggests it will be one of tomorrow's leaders than they are about the fundamental or technical aspects of a stock.

Risk :
Growth investors will experience a lot more volatility than other strategies and the market. What does that mean? That means their stocks drop first and they drop the fastest during bearish periods. This is due to the nature of growth stocks, many are young companies with high P/E Ratios and are viewed as overvalued during market corrections and recessions. Growth Investors have to be willing to ride out losses until the market turns bullish again.

While Growth Investing is not as technically or analytically demanding as a strategy like Value Investing, it is still a very research intensive strategy. Growth Investors have to keep up with more than just the market, they have to know which industries, geographic regions, and stocks are hot and they also need be aware of new technologies, services and products quickly. Successful Growth Investors are constantly shifting to different types of stocks to make sure they stay invested where there is currently a lot of interest and innovation. There is an enormous amount of information available if you're trying to figure out what's "hot" in the market right now. Every web site, newspaper and magazine has a different opinion. Growth Investors have to be able to weed through all of this information and find the stocks that will be tomorrow's leaders.

Risk management is a tricky but critical component of Growth Investing. We at WiTdom have that expertise to balance growth with risk.

Thanking you

Atul Sikrai

Sr Vice President & Head of Equities

wiTdom investment advisory.

Friday, April 8, 2011

Sister of Inspiration

Sindhuja Rajamaran, a 14 year old girl studying 9th standard in India, has now become the world’s youngest CEO. Raised in Chennai, this girl is the Chief Executive Officer of his father owned company called Seppan. Seppan is an animation firm in Chennai. The recognition of youngest CEO was made by National Association of Software and Service Companies. This girl has won awards and recognitions in the past as well. Last year she was awarded the Fastest 2D Animator by Nasscom in Hyderabad. Sindhuja gives all her credits to her dad who is a cartoonist himself. She is now working on a few projects like the 2D movie called Virtual T-Nagar which reveals the true nature of the specific location called T-Nagar in the city of Chennai. She is also doing an Ad-Film with Joy-Alukas, a famous Jewelery Retailer. Corel has also certified her as the youngest digital caricaturist in the world.

The 14-year old girl became the head of Seppan Company, an animation firm, in October 2010. The company was set up by her father. She was adjudged the fastest 2D and 3D animator by software lobby NASSCOM (National Association of Software and Services Companies) at the Gaming and Animation Conclave 2010 held in Hyderabad. "I am just proud to be an animator. The CEO is just a post given in this company," Rajaraman. "I am learning animation for this CEO post to make myself worthy for the CEO post," she said. "There is no age bar or age limit for animation. Everybody can do animation." "The scope for animation in India is growing everyday. There is going to be a big boom in India and all industries are into the animation, they need animation and multimedia. I am enjoying work and I am also getting challenging works," she added.

Hope youngsters get inspired by her efforts and we congratulate on our side for her becoming the Youngest CEO! Regards

Atul Sikrai

Sr Vice President & Head of Equities

wiTdom investment advisory.

Friday, April 1, 2011

Sleep Like A Baby.

When investing your money, keep these words of wisdom in mind: ''If you lose Sleep over your investments or are more concerned with the performance of your Wealth then you is not with wiTdom.” wiTdom promises you not to give you sleepless night. You can relax and sleep like a baby when your wealth is managed by wiTdom. The risk/return tradeoff could easily be called the "ability-to-sleep-at-night test." While some people can handle the equivalent of financial skydiving without batting an eye, others are terrified to climb the financial ladder without a secure harness. Deciding what amount of risk you can take while remaining comfortable with your investments is very important. Get your investment professionally cleaned. Many people do not realize that such a service exists. It is a little known fact that the mites and bugs living in your investment contribute to allergies, congestion, and other breathing disorders that may be keeping you from getting a good night's sleep.Watch what you invest in. Not only is a unhealthy investment conducive to good sleeping patterns.Make a "Investment To Do" list for the next day before laying down. This allows you to get them out of your head and onto paper. If they are out of your head you will be free of the anxiety they bring with them. When you lay down for the night there should not be anything on your mind except how comfortable the bed is.

In the investing world, the dictionary definition of risk is the chance that an investment's actual return will be different than expected. Technically, this is measured in statistics by standard deviation. Risk means you have the possibility of losing some, or even all, of our original investment. Low levels of uncertainty (low risk) are associated with low potential returns. High levels of uncertainty (high risk) are associated with high potential returns. The risk/return tradeoff is the balance between the desire for the lowest possible risk and the highest possible return. This is demonstrated graphically in the chart Above. A higher standard deviation means a higher risk and higher possible return.

A common misconception is that higher risk equals greater return. The risk/return tradeoff tells us that the higher risk gives us the possibility of higher returns. There are no guarantees. Just as risk means higher potential returns, it also means higher potential losses. Happy to Help you

Atul Sikrai

Sr Vice President & Head of Equities

wiTdo investment advisory.