Vikas & Khushboo


There would not be a single person reading this article, who’ll say Corona has not affected their lives in anyways. Few are facing lay-offs, furloughs/unpaid-leaves, or substantial pay-cuts due to this coronavirus outbreak in the world. Financials of every household are shaken in this tough time but rentals and other bills aren’t ending. Sources of earning money are limited in this tough time but the essential requirements have not changed for anybody. It’s inevitable that one needs to have 1-2 passive income sources so that their lives don’t depend on one source of income only.

According to research conducted by McKinsey & Company, the current economic loss in India has varied by sector affecting the aviation segment the most & IT-enabled-services and pharmaceuticals the least. The report strongly suggests that there could be a 30% drop in the discretionary categories, clothing, etc. Indian financial system may face a solvency risk, because of 25% of the MSMEs & the small- and medium-size-enterprise (SME) slipping into loan default.

If you observe high-income and high net worth people around you, you’ll see they have several different streams of side businesses that are pouring in cash every month. It’s really hard to rely on a 9-5 job for your entire life, wherein layoffs and pay-cuts are the part and parcel. A very famous quote is given in this context, “Do not put all eggs in one basket.” – Warren Buffett. With passive income sources, one can avoid putting all their eggs in one basket and use the extra income sources of cash to grow rich.

Here I am sharing few passive income ideas which might suit you as per your interest:

Go Digital: This is the best time to generate a passive income online. In the times of Corona, people have gone digital. Such a crucial service like Education, which always needs a compassionate humanitarian touch has drastically shifted to digital platforms these days. Teaching has been one of the professions which require one to share their thoughts and experiences with others. The same can be done online easily and being done by many people these days for some extra amount of money in their part-time. Few people have even made this a full-time job for them and earn in 6-7 digits a month easily, all in their comfort of home.

And, education expands far and beyond anyone’s imagination. Pick any subject matter and you’ll find classes/courses online. People want to pay you a good amount of money if your knowledge base is strong and an in-depth explanation is delivered in your classroom. You can create a course of your choice on Udemy and earn with each student’s subscription.

Franchising: This is a traditional way of owning a business of a popular brand that already has a good presence in the market. A franchise business can be a really good source of a passive income. Since you do not exactly have to build the brand from scratch or the setup as a whole. As the brand is there to support you in every step of setting up the business and extending the support in terms of marketing, software, and manpower, etc.

Franchising starts at an investment as low as 5lack. You may choose the industry segment of your choice and then narrow down onto the brand which you would want to own.

Also Read: What is Franchise Industry: Basics of This Popular Business Method

Love Social Media? Manage Accounts! Today’s generation loves social media. Why not turn this love into side business ideas? Many small businesses in spite of acknowledging the fact that social media is crucial for their business growth, are not able to devote their time to this aspect of their business. If you have a knack of the same, you may reach out to such businesses. You may do it on a monthly or yearly contract basis and can make it a good source of income.

Get Blogging: Love sharing your thoughts on a particular topic and want to get paid for it? Your blog can make INR 20-50 thousand a month for you via affiliate revenues. You do almost nothing to get this – readers read, they click and sometimes they make a purchase of the product or the services mentioned at no extra cost to them.

I didn’t start DhandhoInvestor to earn money. I started this because I love thinking about businesses & investments and writing about the same. I just want to share some financial independence literacy amongst my readers. The money from the blog becomes the by-product of the passion for sharing the same knowledge with others.

Diversification of Investments: If you are an investor like me, please diversify your investments. Don’t put every penny in equity/shares. You might be placing yourself at risk this way.

Try to secure your money with different investment instruments such as Mutual Funds, ETFs, and Bonds, etc. Also do not put the total amount invested in just one company’s share or one type Mutual Fund. Try to have sector/industry segmentation amongst your investment portfolio for a greater return in a long period of time.

Why diversification becomes so important; can be understood with the current Corona outbreak situation. This pandemic has hit the Aviation, Travel, Food & Beverages, and Entertainment industry very harshly. If in case, suppose you had all your bets placed in either of the above-mentioned industries, your portfolio would be doomed. So, it is always advised to keep a good balance of diversification in your investment net.

Also Read: 10 Secrets That’ll Boost your Money Saving

Selling a Product or Service: You may always pick selling of a product or service as another stream of income. This could be one small side business that you get to control fully on your own. You may choose to become a distributor for a third party agency and help them reach their customer base for their product or service. This work is basically part-time and can be handled over phone calls and emails. But it can earn you really good cash in hand.

Another way of creating a part-time income is to do what you love. You may want to roam around and take care of pet dogs or want to babysit or want to mow the lawns etc. But this can earn you good money over a tenure.

Passive income is one of the most important and fundamental methods that can get rich RICHER. It is how you disconnect your ability to earn from the time that you do have in a day (everybody gets 24 hours in a day, no less no more!). If you’ve known of the terminology “making money while you sleep” no spot-on words have been articulated. With multiple passive incomes, you actually make money while you sleep. Also, you make money while you’re wide-awake. It’s spontaneous and simply keeps pouring into your wealth.

By definition, Franchising is an enduring relationship in which a franchisor provides a licensed privilege to the franchisee to do business and offers assistance in organizing, training, merchandising, marketing, and managing in return for a monetary consideration. Franchise Business is a form of trade by which the owner (franchisor) of a product, service, or method obtains distribution through affiliated dealers (franchisee). (Source:

You have a mind-set of business but neither do you want to buy an existing running business nor building something from scratch seems appealing to you; you could be suited aptly for a franchise business model. Franchising is not an industry by itself, but it is a way of doing the businesses and it can be applied to almost every sector. If we go by the definition laid out by the International Franchise Association, “Franchising is a means of issuing products or services. Wherein two types of people are involved in a franchise system: a) the franchisor, who offers its trademark or trade name and a business system; and b) the franchisee, who pays a royalty along with an initial franchise fee for the right to do business under the franchisor’s name and system.”

A franchisor is a party who is the creator/legal-holder of a brand with a decent presence in the market. The same party is looking aggressively to expand its business model to different locations which require less investment and involvement of it.

A franchisee is a party looking out for business or franchise opportunities in the market. The party is ready to invest and buy the licensing rights to use the brand’s name, trademarks, the standard business processes, and sell the designated product or service of that existing brand. The franchise is a business-person who tries to further sell the products and services of a well-established brand in the market, rather than being an entrepreneur who builds a business from scratch.

The franchisee and franchisor can be a regular or an artificial person. That means, they can be an individual, a partnership firm, an LLP, or a private limited company.

Upon signing the franchise agreement, the franchisee gets a licensing authority for:

  • Usage of the franchise’s brand name
  • Grant to use the franchise’s trademarks
  • Access to the Standard Operation Processes
  • Marketing support for the designated site from the franchisor
  • Software and other operational requirements
  • Proprietary knowledge and material

Once an agreement is made between the franchisor and the franchisee, there is the almost little-to-no role of the franchisor in the day-to-day management of the franchisee’s business. Since the franchisee behaves as an independent operator and is a joint employer with the franchisor.

Franchising: a Better Way of Expansion

Franchising helps a brand to expand to vast locations without any limitation of time and financial expenditure. Setting up a new business takes a lot of money and time investment as well. A brand gets the one time licensing/franchise fee from the franchisee to sign up for an untapped location where they see brand can grow prosperously. Other than the franchise fee, a monthly/quarterly ongoing (as agreed in the Franchise Agreement) royalty fee is settled out between both the parties to be paid by the franchisee.

Also Read: How to Keep Investing during Panic

By choosing the franchising model, a brand can reach such locations in a country where they could never even have thought of expanding if it was to be done by themselves.

Role of the Brand in Franchising

When a well-established brand allocates their franchise, they let the franchisee use their existing market demand and presence. The brand has already invested their time and money to create a buzz for their product or services in the market. The franchisee thus gets a benefit of the existing market demand in the particular region and this helps the franchise attain their break-even point a bit earlier than that of a standalone business that would build the business from scratch.

A brand has a set operational process format for conducting the day-to-day operations of the business. The franchisee is supposed to adhere to a similar operating model so that they meet the standards of operation. These subsequent practices have been created at the brand’s end after committing to a few unavoidable operational mistakes and taking corrective measures afterward. So that the franchisee doesn’t have to worry about the mistakes and corrections; rather focus on the successful completion of the service delivery.

The brand side has done the SWOT analysis well at its end so the franchisee does not have to worry about the opportunities of the business. Yes, few local challenges are always a part of any business that you carry-out and cannot be compared with other operational locations. But their challenges can also be well taken care of when ample protective steps like conducting research before opening the business in that area are done.


Once you decide that yes franchising is the route for you, it comes the time to choose the right one for you. Then you have so many options for industries to choose from, choose the one you feel comfortable to go with. According to your geographic area and the customer strata type, you can go about choosing the right set of businesses to further enquire about.

While researching for a suitable franchise business, you may refer to Franchise India’s list of top 10 franchise businesses. When you’ve shortlisted the companies of your interest, explore the franchise opportunity with them. Any reputed company will be happy to share the desired information with you. If it doesn’t, move on! They’re losing a good businessperson who could make their brand stand out in a new location. Whatever be the scenario, never be shy to ask away your questions directly. Put on your detective hat and scrutinize the business thoroughly.

The smooth flow of finances makes for an indispensable part of running a business. It ensures that your business activities run in accordance to the plan while also providing capital for business expansion. There are several ways such as crowdfunding, angel investors and personal savings that can be used to generate funds for business. However, a business loan is a common way of funding and can let you access a large sum of money. These type of loans are offered by leading financial institutions.

Banks immensely review an application before approving a business loan. These help in gagging the repayment capacity of the business. Before applying for a business loan, you must be well-aware of the factors that are assessed by the bank.

Credit history – Banks consider the credit history to be an extremely important indicator of a borrower’s repayment capacity. It is essential that you and your business have a good score or it could dampen your chances of getting the loan approved. A personal credit score that ranges from 700-750 is considered to be a good score. Financial companies regard a lower score holder to be a potential risk.

Also Read: How to Keep Investing during Panic

Collateral – While banks offer unsecured business loans, there are some secured loans that require you to generate a collateral. The secured lending will involve a collateral that can include anything from a real estate property to a high-value business machinery.

Business cash flow – Banks evaluate the cash flow of the business and use this as a driving factor for approving a business loan. A business with a low cash flow is regarded to carry a risk. For this purpose, the banking institution will ask you to provide a bank statement for the business, as well as for the personal account. The statements provide a clear understanding of the cash flow.

Documentation – Every business has a set of documents that continue to grow with its expansion.  Before approving of a business loan, the bank will need you to present different documents that include identity proof, address proof, business license, financial documents, business ownership proof and more. These documents prove that your business is legal and the lender only offers a business loan after viewing the same.

Also Read: First-Timers: Avoid the Gamble in Market Panic

Lacking in any of the above stated areas can cause a hindrance in the approval of your business loan. Hence, ensure that you sort the same before applying for one.

I believe most of the people in my surrounding know very well that investment is my first love. People have known me for my market-passion and the way I’ve grown in this journey of mine. I love to cater to my friends’ queries when it comes to understanding the market and the investment methods I apply (with whatever little knowledge I do but they have proven to work well for me at least by now). My knowledge is acquired since my college days wherein I began to learn of investment & share-market via a gaming trading platform.

These days, I’m observing a strange tendency of communication from my known-ones to me. I’m getting a lot of calls/text messages and Facebook messenger pings from the people in my family and friend circle asking what company’s share they should invest in. During this market panic they want few short term recommendations from my side to gain some profit out of the situation. Regardless of the fact that I’m a long-term investor and don’t believe in running after any company’s dip or rise in such short term tenure.

“There’s a saying in the market – one size does not fit all.”

While my investment picks might suit you perfectly, they may not make the cut for you. Why??

Because both of us have different behaviors, different risk taking abilities and lastly, different family conditions.

You Approach me with a Fear of Missing Out (FOMO)

Most of the times people approach me trying to invest into share market so that they don’t feel like missing of the opportunity. I would want to ask a single question to all of those investment seekers, “Why do you want to invest NOW?” Were you following any list of shortlisted companies for you? Did you read about the companies’ fundamentals? Did you do your research on how the company wants to shape the business in future? Do you assess the business longevity and relevancy in the market? What segment of business interests you, which you would want to read about?

If any of these questions give you an answer as a “NO”; you don’t really want to invest in a business and become a part of it. Instead, you just simply want to copy your friend’s profile thinking you’ll make the similar profits.

Also Read: What You Need to Know Before Buying Stocks

Do you really think it’s possible? I might have kept XYZ Company under my To-Buy radar for more than few years. I might be following the company’s & its promoter/director’s every now-and-then moves closely. I might be reading their annual and quarterly submitted reports to convince me to buy them. I might have bought the share at a price which was suitable in that time-frame and is not valid now.

And the most important thing, I’ve got into the share buying with a long-term view to earn profit. You might want to sell it in a month or so, which obviously won’t give you the similar results of gain. Then why do you want to get into this just for the heck of buying? Do your own study & research and make your own decision while buying/selling a share.

Always remember, “Investing Is a Single Player Game; Thou shall not have an investment team”. The stock tips can result into blame games and cause more harm than good.

Novice Investor: My Advice would be to go for a Monthly SIP

Mutual funds, NEXT NIFTY 50 and Index funds are few options that a beginner can start their investment with.

Mutual Funds are advantageous for the new investors as they allow you to get the returns of an entire section of the market without having to invest via buying and selling in individual stocks. Which requires you to put a lot of efforts while reading them methodically.

To learn about investing in shares, you need to research each of the selected companies. You must comprehend their financial reports. Financial reports give a brief of how much money the company is making and what approaches it is using to grow their profits. You also must be aware how the economy is doing and how that will move the company and its business. Except you do all this homework, you won’t be able to select fruitful companies.

Mutual funds don’t need as much time to research since the fund manager does that for the investors. But you need to study the past performance of the mutual funds and then decide onto your investments. But in either of the cases, you cannot deny the fact that you need to know how the economy is moving throughout the country and the world as a whole.

Also Read: How to Keep Investing during Panic

To sum up, I would just say it is no-way wrong to ask for stock ideas/tips from friends.

However, it is important to take such advice with a skeptical mind and do your own due attentiveness. It is pointless to play the blame game in future if things go south because you only are responsible for your own monetary decisions at the end of the day.

It was March 2020, we were all set to end our financial year just as every year. Life was sailing pretty normal, but something wasn’t going right in the world as a whole. China was hit by a viral outbreak later termed as CORONAVIRUS (COVID-19) by WHO in January 2020. And, March 2020 it has entered India as well and infected many. The pandemic had taken a deadly shape and the entire country is facing a lockdown situation to avoid any contact with people who could be potential carriers of the virus.

I’m feeling like I’ve time-travelled in my life and telling these stories to my grand-kids. Really? Would I want to share the story this way? I don’t think so! Rather, I’ll share with them the opportunities I could grab during the economic breakdown ad how they made us successful as a family.

The time when we are house arrested as per the Government notice, it’s time to not just Netflix and eat the delicious food at home but to plan for a better life ahead. This Coronavirus pandemic situation has got the economy slashing more than a recession alone would do. Here is what I’m doing to take due advantage of the market scenario and plan for a better future:

Thinking Long-Term

I have never in my investment journey thought of short term investing when I chose a company to pour my money into. I always want to associate myself with the companies that I have belief in fundamentally, and when such happens I don’t detach myself from the same in short run.

I started investing with very little money in few thousands, investing was the only way that I could think of for achieving financial freedom. The journey started in the summer of 2012 and somewhere along the way, it turned into a passion and love for the share-market.

I would like to highlight one of my investments in the company Deepak Nitrite Ltd. Five years ago, I began buying its shares and the very first lot that I bought was priced at INR.60/- per share. During this period of last five years I kept on buying its shares repeatedly and it was a joy watching the share reach the price value INR.540/- per share.

Sir Warren Buffett’s Influence

When I used to read Sir Warren Buffett say, “There will be a Multi-Bagger share in your portfolio which will outperform every other share and will make you believe in the power of compounding” I used to wonder! But personally got to experience in my portfolio with Deepak Nitrite Ltd. I have been holding this share for more than 5 years now, and it has more than doubled my wealth in this period.

Also Read: 10 Secrets That’ll Boost your Money Saving

Initially your investment could be in thousands, then lakhs and then definitely in crores one day. But patience to continue keeping a long term view is really important when it comes to investment. You cannot think of becoming a billionaire unless you start investing with that thousand bucks in your bank account which you could spend sitting in a café in just 2 minutes time.

Nothing is Permanent in this World

We, very often begin taking things for granted. For the first time in my life, I am experiencing such pandemic situation spread in the world which has put everybody’s life in danger. Such situations make one think that nothing is permanent in this world!

While I’m pen downing this piece, I’m reading in the news that we have 550+ positive coronavirus cases in India and 19000+ people are dead due to this deadly virus worldwide. All these people would never ever have thought such an outbreak could lead to loss of their lives.

So, don’t wait for the world to be favorable in all aspects for you. Begin your investment whenever you think you’re ready and are convinced with the company’s philosophy. Just keep a good track of the invested businesses, the market gives an opportunity to buy them back at more reasonable valuations during such crisis situations.

I have a detailed self-made checklist to judge a business before investing in its shares. The checklist has many factors like quantitative, qualitative, management philosophy, valuation, promoter and the full picture for past mistakes. I have made it a discipline to not buy any stock before going through my checklist thoroughly. Also, I keep updating my checklist with new learning regularly.

Also Read: Value Investing: The Butterfly Effect

I urge that one should invest with a long term (at least five years and plus) horizon. But keep checking how the business is performing every quarter. Long-term investment does not mean you invest and then forget about it, instead keep a brilliant track of the same.

Happy Investing Guys!

This is not the investment advice, please do your own research.

People often think that credit cards are only used for shopping or as an emergency back-up. But they are more than that, responsible use of credit improves your credit history. The excellent credit repayment history reflects on your credit score, which eventually attracts favourable interest rates and reasonable insurance plans.

Right now, there are hundreds of credit cards available. Hence, selecting the right one is often confusing. Ideally, the right credit card should cater to all your needs, right from shopping to paying utility bills. If you want to end up with right credit card, here are some important things to consider before applying for one,

Type of credit card

In India, credits cards are generally of two types, Standard and Premium.

  • Standard credit cards: These are basic cards with less annual fees, less offers and rewards attached to it.
  • Premium: These are basically Gold or Platinum cards with higher annual fees and many benefits like cashback, loyalty points, etc. linked to them.

Also Read: 5 of Our Favourite Money Hacks

Finance charge

Credit card users are charged with interest on the debt they owe to the bank, and this interest is nothing but the finance charge. Understanding the calculations of finance charge helps you to get the best credit card. Various things are taken under consideration to calculate the finance charge, such as APR, the outstanding amount, etc. It is always beneficial for you to get a credit card on which many parameters are considered to decide the finance charge.

The Grace period

All financial institutions provide the credit cardholders with a specific amount of time to repay full balance on their cards before calculating the finance charge for expenses. This time is called a grace period, which starts from the billing date. Generally, the grace period ranges from 30 to 45 days. You should choose the credit card linked to more grace period.

Credit limit

Every credit card has a credit limit, which is the maximum amount available for its usage. It generally varies from Rs. 15,000 to Rs. 2,00,000. All banks have their own guidelines to determine credit limits. Generally, the type of credit cards influences credit limits. However, banks consider other factors like credit history and income of the individual to decide the credit limit.

Annual percentage rate (APR)

APR is the interest rate on the outstanding amount or balance after completion of the grace period. All banks have their set of guidelines to determine the annual percentage rate on credit card. Moreover, the type of transactions made on credit cards also influences APR. Generally, it varies from 1.90% to 3.5%. You should get a credit card with a low APR.

Also Read: How Long It Takes to Improve a Credit Score

Annual fees

It is charged on credit cards for all the benefits provided linked to them. The credit card giving organisation automatically deduct annual fees on your account. Sometimes, annual fees come with interest. Find out how much your bank is charging you as annual fees before buying a credit card.

Loans come to our rescue in times of unexpected financial emergency. While sometimes, loans help us sail through tough times, sometimes it brings upon a catastrophe on our future financial health. However, there is no denying that loans have become one of the most diversified offering in the modern world. Take an example of personal loans. Personal loans are a kind of unsecured loans which do not require any collateral. In times of utmost monetary emergency, personal loans are the best remedy to turn to. In fact, personal loans are offered at competitive interest rates for almost any reason today. These are not bound by stringent rules and policies, and can help you meet any desired monetary need at any desired time. Let us look at some of the best reasons for taking a personal loan over any other loan, especially if you are in a cash strapped situation.

  • Personal loans can help your remodel your home – Are you thinking of remodelling your home anytime soon? If yes, a personal rescue could turn out to be your best bet. If you thought that using your credit card in this could be a better idea, let us keep you informed that credit card dues might charge your higher interest rates than personal loans. Let your personal loan add value to your home as per your own choices.


  • Personal loans can help you improve your credit score – A good credit score is pivotal in justifying a stable financial health and eligibility for all future loans. A personal loan can actually help you improve your credit score. If you pay your loan in instalments for a good 6 months at least, it is ought to push your credit score on the greener side. Stretch your loan considerably and pay your loan amount in time, not too early! This helps in establishing a healthy payment history for you.

Also Read: Fastest Way to Lose Money

  • Personal loans can help finance your wedding – Personal loans are the most opted choice for couples today. Be it for their wedding purposes or travel after marriage, personal loans give you the flexibility and freedom to fulfil your wedding plans just how you dreamt of it! The big expenditures would not keep you concerned at your wedding, as you can comfortably pay off the loan in EMIs over the due course of time.


  • Personal loans can help you pay your credit card debtsCredit card debts are often paid back with the help of personal loans, more so because the latter helps in keeping higher interest payments at bay. You can pay back your unsecured loan in easy EMIs and stay away from a vicious credit debt.

Also Read: What are the features of a Personal Loan EMI Calculator?

Apart from these, personal loans also help you in starting a business, funding your higher education or even creating an emergency fund. It is almost safe to say that the perks of an unsecured personal loan can keep you covered against any ad hoc cash requirements. So, if you are looking for taking a loan anytime soon, a personal loan is deemed to be the safest bet for you.


The stock market is quite accessible, making it very tempting for many people to want to invest in it. After all, we’ve all heard stories of people making it big by simply investing in stocks. These days there are plenty of stories of people in their early twenties becoming millionaires by investing in the stock market. This raises a desire in all of us to do the same.

After all, if they can do it, then so can we. Right? Unfortunately, it’s not that simple. On the opposite end of the spectrum, we have people who firmly believe that investing in the stock market depends on luck.

However, that is not the case. In order to benefit from the resources available, you can depend on factors much more reliable than luck. Success in the stock market depends more on knowledge and experience than sheer luck. Knowledge can significantly impact your experience when investing in stocks. So, exactly what do you do?

That’s a good question and one that many beginners often overlook. This is what we call as a rookie mistake. Any experienced investor will tell you that downplaying the role of experience is actually what causes many people to lose their money. It’s too easy to blame luck when it comes to trading stocks. But you don’t need to do that because we’re going to tell you all about buying stocks.

As we said, the biggest disadvantage that new investors have is the lack of experience. For many people, trading stocks can be all based on the knowledge that other people possess. That’s the first rule of investing: you don’t have to listen to what others say. Just because someone wants you to buy stocks from a particular company because it’s ‘booming’, doesn’t mean that you have to do it.

You have to look at the companies you’re investing in by yourself. Different people look at things differently, and you will succeed only when you do it yourself. With that being said, let’s move on to the main purpose of this article.

In this article, we’re going to explore the factors which you should note before buying stocks of certain companies. We’re going to give you tips and pointers which you should look at before making your decision. So, let’s begin!

Looking at Companies and their Products and Services

As we said, you have to look at the company you plan on buying stocks of in detail. It may be wise to look into the overall profile of the company. You may want to ask around about the company’s reputation in the market. For beginners, we recommend that you buy stocks after understanding your circle of competence. The concept of the circle of competence has been used widely as a way for investors to focus on areas they knew best. In simple terms, a basic understanding of the operations and economics of a particular company helps an investor to evaluate the performance of its stock in the market. In such a case, there is no need for one to be an expert on every company. You only have to be able to evaluate companies within your circle of competence. The size of that circle is not very important; knowing its boundaries, however, is vital. Therefore, we urge our readers to buy stocks from companies in their own circle of competence.

Pictorial representation below will help you to understand the concept better:

Outer Circle: Share Market

Inner dark circle: Circle of Competence


When an investor is targeting a group of companies within his circle of competence, not only it is easier to keep track of the company’s progress in the market, but it also lowers the risk of losing money. After all, no matter how inexperienced you are with the stock market, you most definitely will know more about the market around your set of companies. This just makes the decision of investing easier.

Think of it this way. We know that the consumer durable and IT sector in India has been growing significantly in the last few years. In fact, these are one of the fastest growing sectors in the country. This is followed closely by the banking and FMCG industry. The auto sector is also on the rise in India. These are a few favorable industries to think about investing in. (Refer graph below from Wealth Insight May 2019 edition)

Compared to these sectors, telecom and realty industries aren’t growing that much in fact. Even the traditional manufacturing industries in India are quite stagnant when it comes to growth potential. We have an oligopoly in these industries which makes it difficult for new companies to make it into the market. This isn’t a bad thing; it has actually helped the government to regulate standards.(Refer graph below from Wealth Insight May 2019 edition)

Considering both, companies touching highs and lows of the market, an investor has to see and analyze the potential of growth in the company per se. As there can be various short term or specific factors for the growth or decline of the stock of a particular company. Therefore as an investor, one has to see the long term prospect of growth and potential capability of companies business in the time to come to analyze the investing opportunity. Further, the most important thing, thinking long term is the key.

Also Read: Value Investing: The Butterfly Effect

Also from an investor’s perspective, underperforming industries will have to be analyzed from their ability to optimize their sales by reaching a high user base of India.

Are the products or services selling? Is there a decline in the demand for them? These are the kinds of questions you need to be asking before you make the decision to invest in a company. It doesn’t matter how big or small the investment is. As an investor, your focus should be on making money and these questions put you on the right track.

You need to do the research yourself. Don’t follow anyone else’s advice. Most importantly, don’t make decisions based on ‘gut feelings’. While you may get profits once or twice by choosing companies on a whim, this isn’t always the case.

If you want to get the most profit from the stock exchange, then you have to make educated decisions. One of these decisions that you will have to make is how quickly you want your money back. Some people buy stocks of start-ups as their market shares are increasing rapidly because they think this is how they can make a lot of money quickly.

But which companies and startups do you choose? More importantly, how do you decide which company’s stock to buy? If these questions came into your mind, then you’re on the right track because this is where we’re headed to. Up next, we’re going to tell you how to decide which company’s stock to buy.

The profitability of the Company

One of the first things you should look at when thinking of buying stocks of any company is its profitability. This means that you need to look at how much potential each company has to turn in a profit on a quarterly or yearly basis. Depending on how quickly you plan to sell stocks, the profitability of the company can be very high or stable.

Some investors prefer investing in companies which may not necessarily have a very high-profit margin, but which makes an overall net profit on a yearly basis. These kinds of companies are very good for long term investment as they will give you a profit whenever you decide to sell stocks. These companies will not give you a lot of profit immediately but, in the long run, they are worth investing in.

Also Read: 12 Ways You Can Save Tax in 2019

However, the kind of companies you decide to invest in will again depend on how quickly you want to get a profit from them. If this is the case, then it is advisable that you research the company’s market potential.

As a beginner, you probably don’t have enough experience to tell exactly when to buy and sell stocks to get maximum profits. If this is the case then you should definitely look at the market trajectory. Sometimes, some companies make a lot of money during the first few quarters but then as time goes on, their profits begin to fall.

If you miss the peak season to buy or sell stocks then you will find yourself facing a loss. So, in order to prevent this, you will want to keep an eye on the market. The stock exchange in India is subject to changes depending on the political climate as well. New policies can greatly influence stock prices.

The idea behind smart investing is getting familiar with studying the fundamentals of the company and maintaining a strategy around it. Adopt a long term perspective as long term investing is essential to greater success. Also, it’s important to invest based on future potential. As an investor, one might consider the stock market attractive when it tends to rise just before the new yearly budget or during election cycles. However, all these are temporary deals in the market and may not turn up into a very smart investing decision. Therefore, the basic ideology of evaluating a company’s past performance, say for last 10 years, reading annual reports and following the company with its ups and downs, major decisions taken in the past, diversification, its area of operations, expansion plans, etc, is the key to smart investing. Short term investing is not smart investing.

’Lastly, it’s very important that you look at the potential risks involved with the companies you’re investing in. Sometimes, smaller companies which have been doing consistently well in the market, suddenly face a loss or go bankrupt. This is because they’re not equipped to deal with their competitors. Therefore, you also need to look at the company’s initiatives as well.

You should also compare the profitability of multiple companies within an industry. Below you will find a chart of the various companies in the paint industry. As you can see, looking at their business model and their profitability makes it quite clear which company you should choose to invest in.

Future Initiatives of the Company

This brings us to the second section of our article which focuses on the initiatives of the company. It is very important to know about the managerial intent of the company you are investing in. This is actually quite easy to determine.

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All you need to do is, look the intent of the company and the amount of effort it is making to identify new geographic regions for expansions, investment in the new product lines, expansions by acquisitions, entering into different product line or market. All this shows a keen interest of the company to grow and provides for a growth in the returns to the investors, exponentially, needless to say, if all goes well.

These are red flags that management does not care to grow the company. They may be happy with where it is right now, and this reveals that very soon, the company will be stagnant in terms of making a profit- something which is not good news to investors.

This will cause stock prices to fall over time and you may find yourself getting the short end of the stick. It’s not just the telecom industry you should be wary of either. Any company in any industry shouldn’t spend too much time without new releases because this increases the risk of losing their customers.

India is one of the fastest growing economies in the world. And there’s a lot of investment coming into the country from all fronts. Investors everywhere have realized that there’s untapped potential in the country, so naturally, companies are pushing out products as soon as they can to attract investors.

If a company isn’t doing this because it’s happy where it is right now, it’s actually setting itself up for losses in the long term. It’s shouldn’t be about how the management is ‘happy’ about their company’s share of the market. That is not how business is done.

A company with a serious intent to stay in the market will do everything it can to keep its current audience as well as to attract more customers. So, no matter what anyone says about such a company, it is a bad idea to invest in it.

 How much money Should You Put in Stocks?

Now that you have an idea of the kind of companies you should be investing in, let’s move on to the more technical side of it. While there is no set rule as to how much you should be putting into stocks, as a beginner, you should not expose yourself too much to stocks. This is done primarily to help preserve capital.

Since this article is aimed at those who are just starting to buy stocks, it is important that you will be financing your investment yourself. So what will you do? As a standard recommendation, at least 25% of earnings should be invested in the stock market. Regarding the mix of the investment, a commonly cited rule of thumb says that individuals should hold a percentage of stocks equal to 100 minus their age. So, for a typical 30-year-old, 70% of the portfolio should be equities. The rest would comprise of high-grade bonds, government debt, and other relatively safe assets. Further, as you gain more experience and find yourself studying and understanding the rise and fall of stocks more accurately, you can adjust this amount. Also, as the knowledge and experience grow, one may find fundamentally sound companies to invest in.

The Difference between Index Funds and Individual Stocks

A lot of people find it hard to distinguish between these two concepts. In this section, we’re simplifying these two terms for you so that you clearly understand the difference between them. An Index Fund enables you to put resources into numerous stocks by acquiring all the stocks in the same proportion as in a particular index.  This means that it essentially gives you access to all the stocks in that particular index. For example, a particular Sensex index fund scheme will invest in all the 30 companies of Sensex and will perform in tandem and deliver returns. Here, as you see the below graph, the index should deliver returns according to the growth of Sensex.

Individual Stocks, on the other hand, do not generally have the ability to decrease the risk your portfolio is carrying. However, if your investment is spread across several stocks and in case of one stock crash, the effect on your general portfolio is not life altering. Hence, maintaining the right portfolio allocation is important. Also, if we talk about diversifying your circle of competence, an investor can expand it by studying and understanding various other industries and companies and expand its circle of competence over a period of time.

As Warren Buffet said, “Never invest in a business you cannot understand”.

Choosing between these two types (Index fund or individual stocks) can help you make a lot of profit and cut down risk. You should try using both, and depending on what works for you. Also, many investors get lucrative towards individual stocks but it requires a great deal to identify the right set of stock on which you can bet. However, an Index fund can give you a good return if SIP mode is followed.

Also Read: How to Strengthen Your Value Investing

Numerous companies distribute their profits to investors as dividends, while others may prefer to use their profits to reinvest. Financing the purchase of future stocks with the profits made is a good idea as it can help you reduce risk.

Stock Volatility

Before you purchase a stock, it can be useful to know how volatile you can anticipate it to be. This is why we recommended you to look into the company’s history before investing. This helps you to understand how volatile the stock is.

Another thing which you should notice while doing your research is past trends. There are some patterns that emerge when you look at the rise and fall of the company. However, stocks with a background marked by profits give no assurance that they will always make profits. Here the knowledge and the understanding of the investor about the company and the market around it play an important role. A complete analysis is suggested to the investors that include the study of at least 5 years annual report, con calls, presentations, etc needs to be done for better understanding of the company.

This is because stocks with a solid history of profitability may fall for a time being. This is particularly true for big companies. In 2018, HDFC Bank’s stock went down by 15%. Now, any inexperienced investor might have panicked when seeing the trajectory and indeed, many people did sell their stocks. However, this was all in vain, because, by the next quarter, stocks were up by 12%.

This is what we said about timing. You need to do thorough research to make sure that you’re acquitted with the company’s history and profitability well. If you don’t know much about a company and buy or sell stocks based on patterns you see in real time alone, you may find yourself suffering losses. You have to look at both past and future trends to determine when to buy and sell stocks.

Bottom Line

Both professional and novice investors have their preferred method for the measurement of profit margins and value, which they develop by looking at dividends and overall net revenue. However, it is important to note that even with all of these tips, there is no singular way of distinguishing good stocks from bad ones.

There is no denying that people do try to influence the market so you will find a lot of people hyping a particular company because it sounds good. Even in stocks, the saying ‘too good to be true’ exists. If something looks too good, then it is very important that you look further into it. As we have said multiple times through the course of this article, you shouldn’t follow what anyone says.

It doesn’t matter how good they are at trading. Since you are the one investing, you should take a look at companies you plan on buying from yourself. However, at the same time, a stock that looks profitable with double-digit profit margins can easily fall down to losses instantly, and a new tech startup that looks like a risky venture can give you twice the profit.

Also Read: Secret of Value Investing

The cost of a single share isn’t the correct number to assess when choosing if a stock is a decent purchase or not. While triple-digit prices may be unreasonably expensive for one investor with restricted assets, stacking up on penny stocks isn’t really a brilliant idea either.


As you can see, investing in stocks can be a very tricky process. However, if you keep these points in mind as you begin your research, you should be good to go. We would once again like to remind you that luck doesn’t play a big role when it comes to buying stocks. What you need to do is your research in the company you plan on investing in.

You need to make sure that the industry you’re planning on investing in has an overall positive growth potential so that you don’t face any losses in the future. As we have already mentioned, one way of doing this is by making sure that there are no market forces acting against the company you’re investing in. These are a number of factors which we have discussed in this article in detail.

Local and national elections, as well as a crisis in the country, can greatly affect the stock market. Government policies also have the power to influence stock prices so it is very important that you look into legislation and policies before making an investment. Remember, Knowledge with the right set of research and information around company’s current performance and its future potential is the key to making profits because if you are buying the stock at the right price then you can create good value in the stock market. As Warren Buffet said, “It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price

Lastly, we’d like to end by reminding you once more that you should not let anyone influence your decision to invest in particular companies. Sometimes, certain individuals overhype some companies to influence people to invest in them. Be cautious of such schemes and use your own mind when making an investment. You’ll do fine when you do your own research!

Hospitality and Real Estate are two such sectors which have large number of players in them but are still highly unorganised up to a large extent. Quality living spaces are something on which still people have to compromise these days. This is a socio-economic problem, which has been taken up by OYO for proper fixing with the help of technology.

With a promising mission of creating great quality living spaces, OYO has completed the target of becoming a 100% leased & franchised hotel chain in the year 2018. In which they tie up with an existing and not-so-well-performing hotel building for their renovation. The entire renovation is done as per OYO’s branding and quality standards & promises to deliver core services are fulfilled.

Currently, OYO is offering an array of services under their bucket, namely:

  • SilverKey (Corporate Apartments)
  • OYO Living (millennial housing)
  • Pallete (Resorts)
  • OYO Homes (Vacation rentals)

It’s been observed in the year 2018 that number of room nights stayed has increased from 6m in December 2016 to 13m in December 2017 to 75m in December 2018 globally. This shows the growth to be at 5.7x on y-o-y basis.

Here in this visual, I have tried creating a glimpse of the recent journey of OYO taken. OYO aspires to become the largest Hotel Company in the world and this seems pretty evident from the visuals herewith.

Analysis of OYO Business Model

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