Equity Market Basics
Investment is not number crunching and analysis.
It’s about independent thinking.
It’s about patience.
You’ve got to be ready for setbacks.
You have to be down to earth.
The market anyways teaches you to be down to earth.
- Rakesh Jhunjhunwala
That’s what the legendary Indian investor thinks about making money in the equity market. A
quick estimate states that he is worth Rs 2,800 crore upwards. This means that he is a highly
successful investor. We all know that. He has shared some wisdom to the world with the above
quote. Lets understand more.
Before that lets find out what kind of investor are you. Answering the following questions will help
you understand which risk category you fall into.
1. How would your best friend describe your risk-taking capacity?
(A) A risk-avoider (B) A gambler (C) Willing to take risk after adequate research
2. You are in the final lap of KBC and you’ve won Rs 1 crore. You aren’t fully confident of
the answer. Which of the following choices will you go in for?
(A) Go home with the winning amount (B) Play on for 50% chance of winning Rs 2 crore, risking
the amount already won
3. What is your comfort level while investing in stocks?
(A) Somewhat comfortable (B) Very comfortable (C) Not my cup of tea
4. When you think of the word risk in investment parlance, what comes to your mind first?
(A) Uncertainty (B) Thrill (C) An opportunity
5. You receive a bonus of Rs 50,000 that you wish to invest. You would:
(A) Invest in stocks, despite the turbulent market (B) Go in for balanced mutual funds (C) Deposit
it in a bank FD, earning over 9% interest per annum.
6. You have just finished saving for a once-in-a-lifetime vacation. A month before you plan
to leave, you lose your job. You would:
(A) Cancel the vacation (B) Extend your vacation because this may be your last chance to go in
first-class (C) Go as scheduled, reasoning that you may need the time to prepare for a job search
7. Which of the following j