Ash HN: Suggestions for Good Resources for Investing
I would love to understand economics and build knowledge around investing. Please suggest some good resources around economics and investing (stocks, companies etc.)
If on the other hand you want to learn about how to estimate value of companies (this will probably will not have a good return on time or money invested for an individual compared to low effort passive investment approach) one place to start reading is http://pages.stern.nyu.edu/~adamodar/ & http://aswathdamodaran.blogspot.com/
Mode I plan to use with my kids - I have just picked up a great book, I have read the first 3 chapters. 'Warren Buffett's 3 Favorite Books: A guide to The Intelligent Investor, Security Analysis, and The Wealth of Nations'
The author is trying to condense the 3 books into an easy to read book. So far I find it wonderful.
However, it is not recommended you invest only in equity. Market crashes can result in your wealth eroding by 30-50% as seen recently and back in 2008. While it does recover in the long run, it is impossible to say how long a bear market will last which means your money will be locked in for quite some time. Further, your returns may not outperform inflation in a shorter time-frame. Also, if you have an emergency, the money is no longer liquid.
It is highly advisable to diversify your investment across asset classes. Having gold & fixed income (debt) in your portfolio will help protect during adverse market conditions and grow at a modest rate during bull markets. An example is this product which is available to investors in India: https://www.smallcase.com/smallcase/SCAW_0001. It is only an example to show you how asset allocation helps protect against market volatility/crashes.
I would highly recommend you read about portfolio construction using the core-satellite methodology. https://www.vanguard.co.uk/documents/adv/literature/client_m...
It would be wise to create an emergency fund for anywhere between 6-12 months as a separate thing.
Once you're more confident, start exploring niche indices; there are many ETFs. For example, the Bessemer Emerging Cloud Index has performed extremely well since March. An astute investor would have realized that people locked-in and working remotely would result in an increase in productivity apps, video content consumption etc. These rely on cloud platforms for hosting and delivery. One would have invested in it and made some pretty good returns. An investment on March 1st would be up 21% compared with 4% in Nasdaq Composite.
But this requires you to keep an eye on what's happening in the world and being able to interpret it. There aren't shortcuts to this.
But to get started with, you can start learning about the basics of business & economics. This might help: https://learn.tickertape.in/
A very comprehensive resource for learning about investing can be found here: https://zerodha.com/varsity/ (there's a lot of modules on trading, ignore if you don't want to trade. Do modules 1, 3 & 11).
Happy learning :).