Instead of telling you about why resolutions cannot work (mid Jan is too early to dampen your spirits, right)…let me tell you what I have observed about Investors:

1. Out of sheer respect for age, they tell me that they will do something but do not do: When I do a training program in a corporate environment, they participants assure me that they will keep in touch. They ask me for a copy of the presentation, …etc. but I find that the follow up action is zilch. We go our separate ways. Many of them do not even bother to send an email. Fine by me, but the training got wasted, right?

2. People say that they are unbiased, but they are terribly biased: I am so biased in thinking that they are biased, that I have become like a bias seeker. So a guy working in an IT company fills his portfolio with a lot of tech companies because he thinks he can understand them. Great. Hey, he does not understand portfolio concentration risk.

3. People like Pattabhiraman Murari of freefincal.com fame are an insignificant portion of the world population. You need time, desire to learn, deep interest in wealth creation, etc. if you want to be a Do-It-Yourself investor. However it is also a conflict as to what all you should ask a financial planner to do. After all, remember the saying “If it is to be, it is up to me?”. So strike a sensible balance.

4. Once you have bought a share and made money on that, it will take me 40 horses to pull you away from that share. Ownership bias.

5. We do not understand risk. Forget risk we even forget how we behaved the previous time when such conditions prevailed. Every day is a new experience. Forget learning from others, we do not learn from our own mistakes.

6. Man is not a rational animal. He is a rationalising animal. Changing investing patterns is tough for the IFA.

more observations to follow…soon…

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  1. Subra, Visited your blog for the first time. Awesome article. I liked the point 2 as I can see the same in my office. Although I am a learner but our society is filled with so many knowledgeable people who actually doesn’t know much about personal finance.

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