I have done such lessons many a time. So if you are a regular reader some of this may sound repetitive..but they are still worth reading. When you have spent so much time on earth..you have some investment lessons..here
- Continuous Out performance is IMPOSSIBLE: Learning from Maddoff. It is not possible for a fund manager to outperform all other funds over all time periods. If Icici Prudential Discovery has performed better than say Hdfc Top 200 over the past 5 years it does not mean it would have beaten the same fund over 3 months, 6 months, 1 year, 4 year…..it may happen, but it is not necessary that it WILL happen. As long as a fund is meeting your objectives, do not bother too much about relative performance – or relative out performance.
- Saving is difficult, Investing is easy: Many people do not invest BECAUSE they cannot save (or spare) that small amount every month – Rs. 500 or Rs. 50,000 – whatever. So if you started EARLY and saved instead of investing (means you did a RD instead of doing a SIP) you are still smarter than your friends who did NEITHER. Once you set up a habit of saving 5k a month…converting that fixed deposit or starting a SIP instead of a RD is easy. At least you know how to save.
- Between starting early and starting late, starting early EVEN IN A WRONG fund is a better option that you committed to.
- Any way that you invest (or worse, not invest at all) there is risk. Risk of inflation, concentration risk, holding in single name without a nominee, …risks are there in every corner if you invest. Sorry, there is risk EVEN if you do not invest.
- People look for big risk avoiding techniques without bothering to see that the signed cheques are not lying around, making a son or daughter a joint holder without checking whether the son/daughter has given any bank guarantee, giving guarantees to friends who have not repaid loans, …the list is endless.
- Risk management is not easy. Why even investing is not easy, but many people think they can handle it themselves – I have seen successful DIY as well as unsuccessful DIY…
- Investing is all in the HEAD – 90% of investing is in the head…and the other 10% is mental !!
Post Footer automatically generated by Add Post Footer Plugin for wordpress.