You’re at a family gathering, enjoying your favorite ice cream. There is a group of uncles exchanging investment advice like “you should buy XYZ stock and why?”
As a kid, I used to ignore these conversations but lately, I thought to tap into their wisdom and gain from their experience.
One of my uncles is an active stock market investor while my aunt has a Midas touch when it comes to investment. According to my mom “, a lot of credit for my other uncle’s wealth goes to my aunt who manages his investment”.
Below is a collection of pieces of advice from few months of discussion.
Chai & Stocks: One evening, I sat down with my uncle and discussed the stock market over several cups of tea (chai). His advice –
- Always invest in Blue Chip stocks
- Always look at the balance sheet of the company – check the underlying metrics such as overall assets, revenue, profit margin, EPS (Earning per share), DE (debt to equity), ROE (Return On Equity ratio), PE (price to earnings ratio)
- Never buy and sell in bulk
- Never sell when
- Buy stocks instead of selling when the market is volatile i.e. become greedy when the market falls.
- If you’re passionate about any technology or domain, buy stock of those companies.
Gold: “My grandmother used to buy gold whenever she had extra money”. It’s considered the safest investment since ages and provide good appreciation in the long run. Also, it can be passed to the next generation (usually, a wedding gift). I prefer GOLD ETF rather than buying physical gold.
Property: The population is increasing while the land is limited. I think that “one should always have a house that one can call home”.
- Always buy property in a good or upcoming neighborhood
- Buy land for better appreciation
- Rental income is a good source of income when you retire.
- You should save at least 30% of your net income. If you’re married to a working spouse, then you should save one person’s salary.
- Life is unpredictable, you should always have 6 months of an emergency fund