These are some of the queries that I receive – most of them asking me ‘Should I invest in equities’ or EVEN ‘Why do YOU say I should invest in equities’.

Let me first list the questions that I am asked:

1. Will the next 20 years be the same as the 20 years that have gone by?

2. A recent article in a leading Pink daily said that equities and fixed deposits have given the same return, so why equity?

3. Is there some guarantee that equities will give better returns than real estate?

4. If I do not invest in equities, what will happen?

5. Why should I invest in equities at all?

6. Over the past 18 months, people have made profit only because of AVERAGING, not because the MARKET has gone up.

7. My parents never invested in equities, and nothing happened to them?

8. If I do not invest in equities what will happen?

9. You have yourself hinted about corruption in Mutual funds, so why should I invest at all?

etc. etc.

Frankly, I do not know anybody’s portfolio, goals, attitude towards risk, attitude towards an asset with high variability (which most professors treat as risk), …so I cannot comment. Far more importantly what difference will it make in my life, IF YOU INVEST or IF YOU DO NOT? Nothing. Really nothing.

I do believe that assets with a higher variability of returns will have to give a greater return. However I am a victim of my own past behaviour, am I not?

Realty, equities, commodities, debt – all asset classes will make money for some, will lose money for some. A few brilliant human beings will make sensational gains, and a few will match the indices. However a lot of the so called ‘middle class’ traders / investors will lose money in the markets.

Far more importantly people speak to me as if they are doing ME A FAVOR by investing in direct equities or in mutual funds. Frankly I run a blog because i run a blog. Whether you invest, buy real estate, or gold or debt instruments does not matter to me at all. I am not here to teach you what you should do with your money. Your buying Gillette, PnG, Asian Paints, Cholamandalam, Mindtree, Eid Parry, Coromandel international, Hdfc, Hdfc bank, Colgate,…..will not improve my returns, NOR will your buying cause such a price jump up that my portfolio will benefit, so be my guest.

Making money in life is about skill and luck. If you are skilled and work hard, luck will follow.

 

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