Archive for October, 2017

“festival” sale

The festival season is upon us, online or offline where ever we go, we will be bombarded with ads that goes something like ” This Diwali light your home with 40 door fridge”.God knows how we can light up our house with a fridge or tv except when one is opened and other is on !

The festival of lights is now the biggest festival for shopping, again during Christmas we will have another shopping season thrust on us.  When we grew up the only set of new clothes we got would be for Diwali, and no one bothered what brands clothes we wore. Today even kindergarten kids have become brand conscious ! No wonder our parents saved every rupee they could, buy a house and educate us as well. Today we forward whatsapp messages on importance of savings and investing via 50k Rs mobile that we bought on EMI ( enriching the bank, as well as the mobile maker at our cost, of course !) and wonder how we can ever afford to save enough for retirement or childrens education.

Recently came across someone who has taken loans for a Europe tour, and has bought a second car on loan because his daughter felt that going to school in the small car was beneath her !

When did travelling to Europe, or buy a second car to keep up with fellow classmates became a must do?

Obviously having sky high expenses like this adds to stress. While it is perfect to have goals and work towards them, be it travel or a high end car, they must be well thought out, money invested for that goal month on month and then when it is enough used for that goal. So here instead of paying interest to the bank we are gaining returns by investing, and this teaches children that money can not be taken for granted. Money this way becomes a blessing for us to invest with respect and in turn grows so that we can enjoy its fruits.

So, from this Diwali at least, decide whether you will enrich others buying things you don’t need , with money that you don’t have , to feel good for a couple of days and feel bad months after wards paying the EMI to impress colleagues who are doing the same to impress you with photos of new cars and holidays abroad !

Instead sit and write down what you would like to do with your income, how you would like to save and invest and for what goals. This will not only light up this Diwali but many more to come with a sense of purpose and fulfillment.

Wishing you all a Happy Diwali & prosperous year ahead.










The Hare and Tortoise !

We all have heard the ‘ Hare and Tortoise’ story in school. Many of will immediately recall the moral ‘slow and steady wins the race’. We also must have thought this is not a real story but a fable to teach us the importance of doing something right and doing it all the time. Some one actually did test the story out, check the video


The moral of the reality, since this is not a story anymore, is that whether it is health or wealth, small but steady growth is better than running and stopping to run again. Many investors think they can time the market well by jumping in and out of the equity market / equity mutual funds but not many are interested in slow and steady purchases.

Last 10 years of SIP returns of a large cap fund like Franklin Bluechip has been a decent 13%, This Tortoise like investing has produced impressive result. Of course we cant foretell the future / Deposits may have given 9-10% without risk (but with taxes !)  etc but the point is that Tortoise won. While future returns are not in our hands one can i guess stick one’s neck out and say that the slow and steady Tortoise is likely to win again..

Happy weekend,



Behaviour vs Strategy

Most investors and financial experts focus on strategy. Financial media too focuses on strategy interviewing experts and asking what strategy they use etc.  Investors see all these and think that there is some secret strategy to make money and if we master that it would be great. Instead if we focus on our own behaviour we can succeed in investing better.

Behaviour is within – simply to invest for long term, invest when we have money. Strategy is without. Behaviour in investing is like the retired people we see at morning walks come rain or shine, strategy is about some new exercise or diet fad that we start for a few days after the New year  and then give up. Strategy may be good in theory but not many of us can do 100 pushups and live on oats and energy bars.

Behaviour is common sense – which unfortunately is not very common.  Financial media wants us to keep buying new things New IPOs, new insurance plans, new fund offers. But common sense says that all we need is few good investments be it Mutual Funds or stocks and stick to them for a decade or two. Just as advertisements make us feel bad about the LED tv that we bought last year as the new TVs are OLED or some such thing. So too, we are forced to check our portfolio, throw something out and buy something new to feel better. This works wonders for those who sell us TVs, phones, stocks and new fund offers but not for investors !

Behaviour is simple but not easy. It is actually simple to buy some good funds via SIP / STP and go on about our lives but the easy part will be tested when markets crash as they sometimes do, it wont be easy to see 3 years of nil or negative returns after putting money every month  in but those who stick to this behavior are most likely to succeed than the many strategists. Simple is seldom easy.


So focus on getting behaviour right, strategy will follow. Walking / jogging every day is tough but doable. hitting the gym for a few days and posting the pic on FB sounds cool but most likely will not be followed day after day, which is why gyms charge us annually or give huge discounts on annual fees they know most of us will quit after a week or month!

Investing and building a portfolio bit by bit is tough but doable.

Strategy is helpful of course but behavior is essential.