A few days ago I wrote about the Delhi rape case. Speaking of safety precautions, there is really nothing to blame, but still things did go wrong. In retrospect we can say she should not have taken a private bus, right?
Hey, private buses are a way of life in Delhi – everybody does it…so? bad luck perhaps.
The purpose of this post is not to dwell on that, but to see how an investor can or SHOULD protect himself.
1. Stick to simple products – credit card, health and term insurance, savings bank account, car loan, housing mortgage, demat account, index fund, ppf, etc.
2. Beyond these products, say NO. If it is stressful to say no, say ‘I read in Subramoney that ULIPs are bad’. Blame somebody else – hardly matters who.
3. When a salesman speaks mumbo jumbo, he is bluffing – a.k.a Madoff.
4. Ask, ask, ask, ask. I know 2-3 journalists whose IMMEDIATE family never asks them. The whole world thinks they know everything…these girls and boys are smart to know what they do not know. However, they have stupid investment mistakes in their OWN HOUSES.
5. Training NEVER works, LEARNING always works. The desire to learn, know and understand HAS to come from within. I see kids buying wrong and unsuitable products – without stopping to learn what they are doing. I cannot be ‘forcing’ myself on kids through a lecture!
6. The only way a girl can protect herself is by learning self defense – Judo and Karate? But what happens if there are 5 guys and they are armed? Well again, bad luck, but at least there was some level of preparation.
7. It is not as though a person who knows a lot of things about investment CANNOT make mistakes – he/she can and will. This is called bias. Being carried away with the crowd, information bias, confirmation bias, ….zillions of bias about which I have written earlier will all have an impact on the portfolio.
However, the main punchline still remains ” The only protection that an investor can/ should seek is learning’…
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