“The Abhimanyu Factor” in Investing

Investors in Equity markets suffer from what I call “The Abhimanyu Factor”. Abhimanyu in the Mahabharata was Arjuna’s son, who was an extraordinary warrior and the lone Pandava who had the unique expertise of penetrating a CHAKRA formation in the WAR with the Kauravas. However, his undoing was learning only half the trick, while he was adept at penetrating the formation, he did not know how to exit the formation, which leads to his ultimate death in the war. Investors in Equity markets also suffer from a similar predicament. While they enter equity markets through stocks or mutual funds, seeing the uptrend in markets, they don’t quite know when to EXIT the market or book their profits. Some

SLOW AND STEADY ALWAYS WINS THE RACE

Running a Marathon with a day’s preparation? Most times we come across people who are looking at quick and handsome returns, but both these terms are oxymorons. If you get quick returns, it is mostly small and if you get handsome returns it is most often in the long term. Having said this, there is a human inclination to always try a shortcut route to growing wealthy. Many people who are thronging to the stock market, through stocks or equity mutual funds, are part of this tribe of people who want quick returns. This is something like trying to run a MARATHON ( 42.195 Kms) with a day’s preparation. There is only one result. "You could get yourself killed". On running a Marathon, If you are

THE BIGGEST RISK IS NOT TAKING RISK IN INVESTING !

In my capacity as an investment advisor, I come across many people who are totally ill planned for their long term needs. While Equity Mutual Funds would tend to be risky in the short/medium term, it is the perfect vehicle for long term wealth creation. However, most people are too concerned with the short/medium term volatility and therefore stick to conventional bank deposits which yield low rates and are tax inefficient. While this seems to work perfectly well in the short term for them, In the long term I have found that they fall short on their target of income needed. With the current drop in fixed deposits rates, even senior citizens would do well with a small exposure to Equity Mutu

Quit TIMING the market and spend more TIME in the market

Every person who invests in stock markets or Mutual Funds does so for the long term i.e 3 or 5 years at-least ( unless they are speculating). So when one is investing in the Long term, what should one be concerned about? We should be concerned about the quality of the stock or Mutual Fund, past performance and the likely future prospects, right ? On the contrary however, most investors are caught with this obsession of timing the market. i.e. if they are buying their stocks or mutual funds at a low so that they can optimise their gain when they exit after their investment tenure. Performance of Mutual Funds esp is a correlation of the economics of the land.. if Indian GDP in the future g

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