My relationship manager is asking me to buy this product, should I buy this?
I have been asked this question a zillion times. My answer is – why do you not learn what you should know and what your relationship manager should know?
Actually the answer to this is sheer laziness. Most people do not want to learn about investing, but still hope to outperform the market by a mile (so they will not index). Regarding life insurance, the less said the better. They have no clue on what to buy, will not pay fees for consulting, and their ego will not allow them to ask. So they go ahead and s…w their money. Be my guest. If you lose money, hey that is not my problem is it?
Well I think there are a lot of things that you need to understand if you want to do your own investing – in mutual funds, direct equity or almost anywhere. Let me name some of the things that you should know:
Economics: GDP, GNP, employment numbers, growth rate, fiscal policy, monetary policy (hey fiscal and monetary are different, dammit!!), Money supply (M1, M2, M3..), capital account convertibility, crr, irr, slr, cd, cp, dividend yield, current yield, yield to maturity, fiscal stimulus, green shoots, QE (1 to 100), fiscal deficit, repo rate, hedging, derivatives, oil bonds, inflation, stagflation, sensex, yield curve, relationship between interest rates, inflation and others, etc.
Accountancy: Balance sheet, Profit and Loss account, ratio analysis, fund flow, cash flow, auditor’s report, auditor’s qualification, return on networth, debt equity ratio, roce, ronw, roa, …etc.
History of the capital markets, equity markets, debt markets, banking basics, etc.
this is just an indicative list – will keep adding…
There are 2 ways how you can use this list.
One: a lot of this you will surely find on www.subramoney.com for sure. You could read and learn.
The easier thing is to keep this list handy in a meeting with your Relationship Manager. If you use all these words with your RM there is a chance that he will not call you again. He will be intimidated. Either he will disappear or offer you simpler products like a an index fund, term insurance, savings bank account etc. Either way your purpose is served!!
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