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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  1. Points i and k are 100% true, speaking from own experience…Im all-equity and friend is 100% gold and property:)….Also indexing is the panacea for most equity investors ills…

  2. Why index fund ? Is it ok if we invest in diversified equity fund which has consistently performed well for the past 5 / 10 years

    Also, would like to know, what is indexing

  3. Subra: Have been reading this blog for quite sometime, but now observing a trend…

    1. around 3-4 months back, the blog use to provide some useful tactics
    2. something to learn and absorb from an experienced person
    3. used to be informative

    Now in last 2-3 months
    1. kinda going like upadesh channel
    2. I don’t care attitude is very prominent
    3. very less information and more garxxxx

    Sorry, I am being rude and probably have no right to say any of the above. Its your blog and you can do what you want. BUT, as a fan of your blog just wanted to mention it….

    Not meant to hurt anyone’s feeling and feel free to delete the comment….

  4. i liked Isitpossible’s comment. I always found this like an upadesh channel clearly, clearly and upfront saying ‘this is my view, if you do not like it, leave’.

    I actually LOVE that attitude instead of trying to please everyone. I also like your articles which are HARD hitting – and clearly not worried about a section of the audience which may be getting hurt.

    frankly I never found any ‘information’ – must hasten to add i do not see subramoney as a competitior to Google…so not cribbing.

    Sir keep up the ‘I do not care attitude’…If some readers think that other blogs, channels, etc. LOVE them, well, well I am not thinking on those lines for sure.

  5. Investing in an index fund is investing. I have said this earlier, I PERSONALLY do not invest in an index fund.

    Yes, Jayaraman you can invest provided you know which fund will outperform the index over the NEXT 10 years, not past 10 years. So if you are confident of a fund and are sure that it will outperform the index over 10 years, do invest in such a scheme.

    Thanks Pooja you have answered Isitpossible’s questions.

    As a policy I let all comments remain – after all when i say ‘I do not care’ I should mean it, right?

  6. Subra Sir

    One more query , how r we going to get investment advice from you if we dint watch tv (business channels) ?? 😉 🙂

  7. Anmol equity research is difficult. If you do not do that just signing a cheque favoring a broker (easy part) SHOULD NOT BE DONE.

    If you STILL think that watching TV gives you investing ideas, it is time you got some investment education. Reading subramoney is a necessary BUT NOT sufficient condition.

    Yes Saravanan.

  8. Subra Sir

    You too come with your investment advice on tv18 … 🙂
    toh tv18 toh dekhna hi padega na sir .. !! 😉 ??

  9. Subra….all of the points are true , agreed:)..its just that the points I mentioned resonated very well with me:)

  10. @ Jayaraman V — There is no “one right path” in investing. If you feel that the equity funds you choose will outperform its chosen benchmarks and its peers over the next 10 years ,please invest in them. If you are not confident about that , please invest in index funds tracking different indices. If you want to hedge your bets , put 50-50 in both active and passive MFs. And once you reach a stage , where you have sufficient knowledge , education and experience about the markets , feel confident about analysing companies, and businesses and keeping track of them , start with direct equity investing.

    I believe Subra does not invest in Index Funds or even Active MFs. ( Not sure , though:)) .He is confident that his equity portfolio would outperform the index and any other fund manager. That could be the outcome of long years of experience and a disciplined process. I invest the bulk of my money in Active MFs, a smaller portion in Index Funds, and the smallest portion in direct stocks.You should work out what would be the best path for you according to your comfort level and expected returns. Each investor should do , what works best for him and gives him a good nights sleep, taking into account his overall asset allocation.

  11. Hi everybody and Subra Sir,
    I am going thru all these for 1-2 yrs, even today going thru the remarks/comments i found that we really are in a hurry to get quick tips/money etc etc. but forget the basic’s of life as subra sir is mentioning as well. Its our money and with decipline and some interest/education we can protact and grow this step by step. so learn it all dear with fun.
    Bye

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