Direct Equity Investing - Is it For you?

People may think why not direct equity investing rather than investing in mutual funds? Why to pay 1.5% annual fund management fees to the fund managers?


Well, let me ask you the simple question.


What is the P/E or PEG ratio of Reliance Industries right now? And weather its over valued, under valued or fairly valued? If you don’t know the answer of this simple question than well, direct equity investing is not for you. You will surely burn your money in direct equity investing. To save that 1.5% annual fund management fee, you will surely do a large disaster with your money.



Many people also plan to invest in equity by following the advise of their friends/broker/brother-in-law. Well, this is not the right kind of equity investing.


Direct equity investing demands lots of time investment on daily/regular basis to research the markets and the best scripts in the market. If you are not going to invest this much time in the market than direct equity investing is not for you. You can’t build fortunes in direct equity investing by following your brother-inlaw's advise.

• Returns generated by professional direct equity investing and mutual funds are exactly the same.
• If you are going to invest in equity by following the advise of your friend/broker/brother-in-law than direct equity investing is not for you.
• Mutual funds have a team of research analysts who take highly informed decisions on behalf of you.
• Only go for direct equity investing if you are willing to invest 1-2 hours a day for equity market research