Do it yourself

  The benchmark Nifty 50 index has given almost no return in the past 12 months. Nifty Smallcap 100 Index is down over 13% and Nifty Midcap 100 index is down about 2.5% over the same period. Adjusted for dividends and inflation, the real returns would be worse. On a comparable basis, the benchmark S&P 500 index of US yielded a negative return of ~15%; Stoxx500 of benchmark index for Euro Area returned negative 12% and Hang Seng, benchmark for Hong Kong market, returned a negative yield of ~30% over the same period. This is a popular set of statistics that is used by market participants like advisors, portfolio managers, and wealth managers etc., to advance arguments in support of their past performance and future prospects of investments made now. Investors use this set of statistics in a variety of ways. For example— ·           Investors following a relative return strategy may find comfort in the fact that their portfolios have pe...

 Over the last weekend, I attended a lecture on the doctrine of Karma, read couple of books on philosophy of investment, and observed zillion of nuggets of investment advice, apparently written by highly successful investors and/or advisors, on my social media timelines. Admittedly, all this was quite befuddling for me. Everything, I read or heard caused an overflow of conflicting thoughts and emotions. I spent the entire Republic Day holiday in extricating the entangled thoughts. I am not sure, if I attained any degree of success in my endeavour. Nonetheless, I understood the following very clearly– (i)     Like any other Karma, the process of investing in financial products is personal to every individual. No two individuals will have exactly same investment plan – strategy, goals, process and outcome. The similarities between religion (morality, ethics etc.) and investment end here. (ii)    Investment advisory issued (free) to common public is mostly...

I received lots of comments on the yesterday’s post ( Investing lessons from down under ). Most commentators agreed with my view that a good portfolio must be a balance of consistent compounders and emerging businesses; whereas few expressed strong disagreement. Unsurprisingly, amongst those disagreeing were both types of investors – those who prefer to stick with consistent performers; and those who prefer emerging businesses with a potential of abnormal returns in short to mid-term. I find myself totally disinclined to argue with any of the commentators, since I strongly believe that investment is essentially a personal endeavour. Each investor will have a different strategy based on his/her personal circumstances, requirements, and aptitude. The widely followed investment strategies are basically templates. Individual investors customize these templates to make an investment strategy most suitable for them. I however would like to discuss one thing that stuck me hard while readi...