Let us take a typical Punjabi wedding in north India….there are many people who carry guns and fire in the air. Why the do it does not matter, but they do it.
Or let us take the case of a kid who is asking his mother permission to go to a friend’s house – and the house has a swimming pool. The mother says no. They have a pool – and I do not want 2 unsupervised kids going to the pool…well that danger is real. However not sending a kid to the other house because there is a gun in that house is mathematically not correct.
Similarly in the Punjabi wedding the risk that guns will be fired is SCARY…but the killer is the rich food..it reduces say 10 days in the life of 4000 guests!
Exactly similarly in the portfolio of any person the risk that scares is the volatility (during Harshad scam my brother lost 4 lakhs, during Ketan’s scam….blah blah blah) but really the risk that kills is INFLATION..which is a sure NEGATIVE compounding for a long period of time.
If you know what compounding can do to your wealth over long periods of time…just put a -ve number and see how it can harm your portfolio.
Most Indians especially in the government service and public sector units…keep their money in bank deposits and post office deposits. Over the past 10-15 years the number of participants in the equity markets has declined substantially. All these people have lost a chance to put their money to work…and that is sad.
They do not realise that the risk that kills is different from the risk that scares…LOL
Post Footer automatically generated by Add Post Footer Plugin for wordpress.