Some financial observations which sound so so simple that people need reminders:
a. You, you and only You have your financial BEST interest at heart: how can somebody forget this? Well laziness takes over. When you let your mind play havoc with ‘what is correct’ it happens. Learn to meditate before you learn to invest, and tell your self this basic basic financial axiom.
b. A clear fall out of ‘a’ above is NOBODY else has your financial well being at heart, BECAUSE they have their OWN financial well being at heart. So your relationship manager, broker, magazine or blog publisher, …etc. etc. have to be taken with a pinch of salt.
c. Everybody in the financial services industry is an insider. Remember if I want you to buy equity – it maybe because I am an out and out equity fan for the long run.
d. For heaven’s sake do not try to predict the future. If you do not like this advise go and see the financial press say 10 years ago. See which countries were strong and which were weak. Not long ago India was told you have too many people. In 20 years Indians maybe doing all the lower end jobs in EUROPE as it runs out of people. WE HAVE NO CLUE. Accept it.
e. If you do not know how to invest, LEARN. Also ppf, nsc, REC bonds, may not be good investments (they are saving instruments, not investments) but it is far, far, far better than 80o0 of 9000 listed companies. So save, save, save.
f. Once you have saved put some money in an index fund – and start doing equity research. Stick to ONLY the A group or the TOP 100 listed scrips for your experiments, and that too buy small.
g. Watching television is injurious to your physical and financial health. If all news is breaking news, obviously something is wrong. This is sheer financial porn. Serves no purpose in the long run, so stay away. The same is true for the financial print press too.
h. Discipline and indexing are far more important than a degree from IIT or Ivy League. This has been told to all of us by zillions of people including Warren Buffet and Peter Lynch. I am using this post to REMIND you, that is all.
i. Have a very good, cruel, contrarian FRIEND: for example I should have a commodity and real estate lover to discuss my equity strategies. If your spouse can play this role, super great. If you do not have a person like this, start the search today.
j. There is no perfect investor or perfect investment. Remember Warren Buffet lost the Technology boom including Microsoft? or that he has missed gold – which has had a brilliant 15 year run? So remember this, that is all!
k. Forget past performance. At least in the Indian context some of the stories that are currently happening are spine chilling. So much of vested interest covers it that you will be shocked. Yes good companies will remain good – you will not have corporate governance issues in say Colgate, and Sahara will not become a good company, but fund manager performance is not something you should be too carried away……
So these are some more basic rules for investing…..have fun but take care while investing….
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