Be careful when go to stock market.

Yesterday evening, I attended a lecture that was an awareness program on ‘invest in stock market’ and that was followed by dinner. It was organized by the institute of company secretaries in Pitam Pura, Delhi. The event was inaugurated by Mrs. Meera Aggarwal. There were two main speakers who tried to enlighten the audience. The program started late by fourty-five minutes as usual happens in our society. The first speaker began his talk with a story that was as follows. Once, a man along with his assistant went to a village. They had so many monkey cages. Having seen these cages the villagers were amazed. One of them visited the man and enquired about the cages. The man said to him, ‘we have come here to buy monkeys as there is a lot of demand of them in the city and we will start our business from tomorrow. He can announce it in the village’. Next day they declared the buying price that was one hundred rupees per monkey. The villagers started catching the monkeys and selling them to the buyer. Within a week, the buyer increased the price by one hundred rupees per monkey, so the new price of a monkey was now two hundred. Just after a week, the buyer declared the new price that was five hundred per monkey as the villagers hardly caught one or two in a day. One day the buyer went to the city and his only assistant was left in the village. Next day, the villagers came to see the buyer but found there only his assistant. The assistant told them that his boss had gone to the city for some work and would return after some days. The assistant proposed the villagers to buy back the monkeys at the rate of seven hundred rupees per monkey and he also informed them that when his boss returned there he would declare the new buying price, one thousand rupees per monkey. In that situation they could sell their monkey at the higher price and might get profit easily. The villagers found his offer quite attractive and started buying the monkeys from him. Within a day he sold out all the monkeys to the villagers. Next day in the morning, he also left the village by saying them bye with the promise to come back soon. But both of them never turned up there again.

 

After completing the story, the speaker said, ‘the same type of story is used by some companies who float their new issues in the market. The investors who invest their money in these companies are also cheated as the villagers were deceived.’ With the help of the story, the speaker warned the audience that they should check previous track record of a company in which the investor wanted to spend his money.

 

The other speaker suggested investing in mutual funds as these are safer than other options. He also said, ‘there are two types of mutual funds. In one option MF invest your money only in secured bonds and you may get about nine percent returns that is exempted from tax’. In another type they invest your money in the share market with the help of their experts. Here, you may get more profit but with risk of losses also. Both the orators gave us much useful information in this regard.

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