The article focuses on most frequently-asked questions by a retail investor, and the important factors she/he has to know while planning for an investment in capital markets.

Retirement, a time to enjoy life! A time to do what you want to do, when you want to do it, how you want to do it. Rahul is a successful professional manager having worked for the last 38 years in the field of sales and marketing both in India and abroad. He currently works for a reputed group in south India as a general manager, marketing. He has been in this assignment for the past five years. His wife, a graduate and a home-maker, has been the backbone of his success.

They have two children-a son and a daughter-both engineers and well settled in their careers. Rahul, at 58 though well settled, has a few lurking fears about his future after the impending retirement in two years. Though his present salary includes good cash and perquisites, it does not provide for any superannuation benefits or pension which is the cause for his anxiety. Rahul likes to maintain the current lifestyle even after his retirement. He does not like taking any financial support from his children or his relatives. As he owns a house, his current expenditure is around Rs. 25k a month and he would like to earn around Rs. 30k (considering inflation) after retirement. His accumulated savings deployed in various safe investments would give an income of Rs. 22k a month.

He needs a minimum of Rs. 8k as regular additional income every month over the next 25 years. He is ready to allocate Rs. 5 lakh for this purpose, and is exploring various plans for achieving his goal. He takes the help of his friend Sachin, a Chartered Accountant and wealth management consultant who gives his valuable advice regarding investing in the share market. After their first detailed meeting, Rahul is very clear and eager to start investing in shares right away. However, Sachin advises him to thoroughly read and learn the primary as well as the secondary markets, and also the annual reports which he starts doing immediately. Sachin also explains to him how to read and understand the profit and loss account, balance sheet and the ratios to be kept in mind while gauging the soundness of the company.

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