An explanation on my investing methods

 An explanation on my investing methods

I have been asked in the past and also constantly every few weeks that why am I so conservative and my suggestions for fund Selection .

I am asked why I do not suggest ETF or direct stocks or other avenues like REIT or INVITS.

The simple reason is that when I have to offer a common advice to over 1000 people it has to start on a plane and a simple platform.

The question here is not just of investing, but developing a habit and a subconscious activity that you’re saving and investment is a very important part of your working life.

And since our working, life is very unpredictable and uncertain, it is important that we accumulate that Wealth as soon as possible.

At various stages of wealth generation that is after reaching levels of 30-50 lakhs or even one CR people contact me to ask what changes can they make in the portfolios?

Since this communication is mostly direct with me, I suggest that they can diversify into various other channels because then the discipline becomes intact and it is possible for them to take calculated risks.

But all this has to be built up upon a base of a minimum corpus, which can be different for different people.

In the process of accumulating and building wealth up to a certain amount that is 50 or 60 or 75 lakhs you develop a kind of patience and also become familiar with different aspects of investing NR ready to take any risks further on.

By then your salary also increases, and then apart from the standard mutual fund portfolio, which you have been investing in, you can start taking your own chances with sector, funds, index funds, thematic, funds, and other formats of various hybrid funds.

By this stage, you will also realize that all the current themes which keep coming up every few years are actually seasonal and if you get into them, you must also learn how to get out of them.

This group serves as a kindergarten for lifelong financial planning. It is not your college or university for that either you will have to contact me directly or you will have to take your own route with the help of a professional financial planner or MFD.

I have absolutely nothing against direct stocks you can always invest in them, but a small warning from my side would be to keep it parallel with your mutual fund investments.

One mantra that I will give you for your direct stock investing is that whatever amount you set aside for investment you should never let it disappear .

that is after selling a particular stock Make sure it comes back to your stock portfolio back account. 

I have seen that even multi bagger stocks been sold the proceeds are spent on frivolous things.. and that is why the Wealth is never built via stocks.

Mutual funds create wealth because one rarely touches them even if they are not performing adequately.

The moment the moment fluctuation of prices in stocks and the high profile treatment on the television and social media gives a very short life to each stock and does not allow you to hold it for long for it to give you benefit .

I have myself been investing in direct stocks and later in ETFs for as long as my working life, but two things that I have been able to understand this …

Firstly, the returns overall are not worth the time that you spend in it 

Secondly, only about 10% of your stocks may actually turn out to be multi bagger or worth investing and their history becomes much longer than the human memory .

So if you are new to investing join the group to get into the habit and start building your wealth and later with the help of a professional financial advisor, you can decide on other formats

Parallels between Health and Wealth

 Parallels between Health and Wealth

I have never been a sportsman or an athlete. Despite being the house captain in school, I could never lay a claim for anything except a consolation prize in cross country.

However, despite that since early childhood, I have been a yoga practitioner and something that I have managed to carry through my college and three decades at sea .

Even though I have tried running and Gymns in between but yoga stayed.

Around six months back, I discovered HABUILD yoga by Saurabh Bothra who is an IIT engineer. 

While doing yoga with him, I realized that his movements were too simple for me and actually his asnaas were very few but repetitive and hence very effective.

Every time he gets us on the mat in the morning, he just says one thing that coming for exercise is what matters and is sufficient .

While mulling over my coffee today, I realized that isn’t that precisely what we also insist on this group .

Just get into the habit of investing in simple products, but be continuous and consistent .

In the past, I have tried cycling in a big way had two accidents and gave it up .

Went on to body building in the gym got bored and slightly injured and again gave it up .

Isn’t that quite synonymous with what we do in investing .

Jumping from one format of investing to another . Moving from high risk to higher risk and losing capital and then coming back to bank deposits and saving accounts and calling stock, investing, bad and  synonymous to speculation and gambling.

So in various walks of life, I have seen that similar high profile movements don’t really make much difference in one’s life.

I have been an ardent fan of following the middle path in life- right from school time when I read Richard the second by Shakespeare.

It clearly says that violent fires and thunderstorms don’t last long , he who runs fast gets tired, very easily and fast, he who tries to eat like a glutton chokes on his food…

So in life, it is consistency and discipline which matters . And of course, we know that daily consistency and continuous discipline is the most difficult.

Those who have been to the gym, maybe knowing the difference between repetitions of an exercise or using higher weights or resistance, in a single movement for long. Both are good, but serve different purposes.

So certainly take up different avenues and formats available to you in investing your hard earned money and grow it more and more in keeping with your risk appetite…

But before that, make sure that your basic joints and muscles are in good shape in form of a good bank, balance, and wealth, created by regular investing in vanilla mutual fund schemes.

Once your approximate corpus is achieved, or you feel that your main investing process has been going on for a few years and nothing will move you away from that- then you can take the decision of going in for slightly riskier things …

Risk is not something that is in an activity which you take without understanding or knowing of.

Risk means a calculated uncertainty, the process of which is well known to you, but only the outcome is not certain.

So define the philosophy of your life on your own, and please move on always keeping in mind that MONEY IS NOT EVERYTHING IN LIFE, BUT BEFORE SAYING THAT YOU SHOULD HAVE MADE ENOUGH OF IT…

So help you, God …