I was just wondering why Chartered Accountants who know everything about investing and taxation…do not invest in Equity markets or Mutual Funds?

Well here are the reasons:

  • they earn so well that they do not think that their money needs to earn money
  • they are NOT TAUGHT how to invest money
  • their education is not very good in terms of personal finance
  • for a CA who is about 45 years of age he did not read about ELSS when he did his CA
  • most CAs are updated only on what they studied for an exam OR what they need for their living
  • most CAs do audit or tax for a living – and updating themselves there is a necessity so they do it
  • most CAs do not do a balance sheet analysis for a HOBBY – that is understandable
  • CAs who do audits in a big way are suspicious of the whole world

Having said all that…

  • there are many CAs who are successful investors – Vallabh Bhansali and Rakesh Jhunjhunwala being prime examples
  • Investing is a full time profession – so VB and RJ do not do anything else
  • Many CAs are behind the scene for many investors and are thus not famous at all
  • Many CAs are in wealth management – Raamdeo Agrawal – is a good example
  • Many CAs write about investing processes, research, etc – Debashis Basu

To the outside world Chartered accountants are experts in taxation, and investments. They are not always investment experts. Actually the education that they have DOES not make them an expert. The fact that they use their education to become experts makes a few of them experts..and some of them like VB, PP, RJ, stand out as stalwarts. Those who do not work in this field are obviously not experts.

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