Please Advice (1 Lakh 3 yrs with High risk)

surfingminds · #1 22nd September 2007, 11:13 AM

Hello every body

I want to invest 1 lakh Rs for the period of 3 years min. let me know which are the best script or how should i diversify to get maximum return as i can take maximum risk for this amount.

As I already have mutual funds i am just looking to put this money only in equities.

Please advice.

AmoghG · #2 22nd September 2007, 11:19 AM

Divide your money into 10 equal parts, and then invest in companies with a high degree of negative corelation.

surfingminds · #3 22nd September 2007, 11:41 AM

I would rather think of deviding it 5 5 10 10 10 10 15 15 20 but what you mean by negative corelation.
and can you suggest some counters at present..

surfingminds · #4 22nd September 2007, 11:42 AM

I would expect it to become 3 lakhs is it reasonable?

Prabhjeet · #5 22nd September 2007, 11:44 AM

Simple! Just invest all your money in equal parts in all the RELIANCE stocks lile rnrl,rpl,rel,etc. Your money will grow well

oxusmorouz · #6 22nd September 2007, 02:07 PM

Quote:

Originally Posted by AmoghG

Divide your money into 10 equal parts, and then invest in companies with a high degree of negative corelation.

eh, if the correlation coefficient between A and B is -1 and between B and C is -1, doesn't it mean the correlation coefficient of A and C is +1, thus making a portfolio composition with A and C additive to the risk profile of the portfolio?

CreditViolet · #7 22nd September 2007, 02:37 PM

Quote:

Originally Posted by oxusmorouz

eh, if the correlation coefficient between A and B is -1 and between B and C is -1, doesn't it mean the correlation coefficient of A and C is +1, thus making a portfolio composition with A and C additive to the risk profile of the portfolio?

.......

surfingminds · #8 22nd September 2007, 02:43 PM

any one can explain in simple words

AmoghG · #9 22nd September 2007, 03:08 PM

@surfingminds:

Quote:

The correlation is a way to measure how associated or related two variables are. The researcher looks at things that already exist and determines if and in what way those things are related to each other. The purpose of doing correlations is to allow us to make a prediction about one variable based on what we know about another variable.

Positive correlation

In a positive correlation, as the values of one of the variables increase, the values of the second variable also increase. Likewise, as the value of one of the variables decreases, the value of the other variable also decreases. The example above of income and education is a positive correlation. People with higher incomes also tend to have more years of education. People with fewer years of education tend to have lower income.

Negative correlation

In a negative correlation, as the values of one of the variables increase, the values of the second variable decrease. Likewise, as the value of one of the variables decreases, the value of the other variable increases.

This is still a correlation. It is like an “inverse” correlation. The word “negative” is a label that shows the direction of the correlation.

There is a negative correlation between TV viewing and class grades—students who spend more time watching TV tend to have lower grades (or phrased as students with higher grades tend to spend less time watching TV).

@oxusmorouz:

Well you can't have all mutually exclusive asset classes. There is bound to be some clashing. How one deals with it is dependent on one's risk appetite.

HTH.

handique · #10 22nd September 2007, 03:21 PM

invest in some good stocks, like RNRl & RPL, the price of these scripts are low and within a span of 3 years you can expect a good return..

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