Archive for February, 2014

Wealth through glorious inaction


Managing your career, or home requires action. The same can not be said of investing, there the action required is only in evaluating a investment and then deciding to invest on it. Checking out after that say once a year to see if any course correction is required. Like the Zen concept of glorious inaction, our investments act for us.


Prof Sanjay Bakshi an investor and teacher of behavioural finance. on a recent visit to Chennai, gave a talk on the concept,


The basic idea is that if you buy quality companies even though they be relatively expensive compared to others, you tend to benefit over longer periods of time. Key word here being quality of course.  Once that is done, the investment plan is more or less on auto-pilot.

Buying the first private sector mutual fund Kothari Pioneer Bluechip ( now Franklin India Bluechip) has generated around 20% return per annum for last 20 years.  Apart from signing the initial form and cheque an investor had to do absolutely nothing else.

This is the epitome of glorious inaction, as the market acts on our behalf in creating wealth.