Many people write in or ask – what should my relationship manager tell me about my portfolio / new investments. Here I am trying to make a partial list.

1. I need to profile your risk – and your risk profile depends on your age, your income, past investment experience, your projected income, your needs and goals, etc.

2. Investments are subject to market risks – markets can go up or go down

3. Your investments, technically, can go down to zero.

4. If there is a lock-in, you may not be able to withdraw exactly when you need it!

5. Leverage hurts, leverage huts and leverage hurts. There are 2 types of leverage – a) when you borrow and invest and b) when you buy things on ‘installment”. If you have COMMITTED to a Rs. 50 Lakhs fund but paid only Rs. 5 lakhs, rest assured the call can come EXACTLY when you do not want it to! Committing to a PMS is perhaps the stupidest thing to do, but it is routinely done in a bull market.

6. ULIP makes more money for me, Term makes more sense for you.

7. A risk free, highest earning instrument is IMPOSSIBLE to find.

….will continue….

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