How much experience does it take to truly master the art of investing?3 years?Not a chance. In the last 3 years, markets have been riding high without even a 20% correction. It’s been more like a joyride than a test of skill.How about 5 years? We saw a market decline due to Covid in 2020 that threw us all in a loop. Shouldn’t it count?I don’t think it should count. You see the market went…
A client of mine asked me if we could invest in infrastructure funds, given the strong focus of the Government on the infrastructure sector.The sector is undoubtedly expected to do good, but is it a good investment right now? Most probably not! Why is that so? Because it has been a popular narrative for quite some time.But, what’s the problem with investing in popular narratives?The problem is the level of valuations.Popular investment sectors or themes gain momentum…
A retirement crisis could turn out to be the biggest headache in most of the countries, including India.This has been voiced by many veterans earlier. Recently, an article by The Ken titled – Why more 40-somethings are becoming ‘unwilling retirees’ brings the spotlight back to this topic.Gone are the days when one could think of retiring comfortably in their 60s. The retirement problem en-mass will show over the next decade.Many factors are playing towards this…
Do you know that direct plans of mutual funds offer much higher returns than regular plans, more than the difference in their expense ratio?To know better, read it till the end.Every mutual fund scheme has two plans to offer – Regular & Direct.Both plans have the same fund manager and the same portfolio. The only difference is the expense ratio. Ideally, the difference in the expense ratio of the direct and regular plans should be the…
As many of you know, I am an investment professional. Very few know that I am also a regular table tennis player. I play at least 4 to 5 times a week. Therefore, it’s natural for me to think of analogies from table tennis that apply to winning the game of investments.Here are three fundamental qualities that you need to win in sports and investments (applicable to many sports but I will stick to table tennis…
One of the questions that bothers a lot of people is whether they should invest their savings or use them to pay off their outstanding loans. I have encountered a few cases where a significant amount of money was kept in a savings account that was yielding 2.5-3.5% returns while an outstanding loan costing 8-9%. Most of the time, it’s because of indecision regarding the usage of money and a lack of understanding about compounding.Ideally, staying…
Known Fact: Equity markets go through a cycle. The cycle of peak and trough. The cycle of greed and fear. Cycles have happened multiple times in the past and will continue to happen multiple times in the future. Every time underlying reasons for a peak and trough are different but one thing always remains constant – human behavior. Every peak is accompanied by an aggregation of collective greed and every trough is strongly correlated with an aggregation of collective…
Imagine you have been told about an investment opportunity in a business. The numbers look fantastic from all angles. High margins, rapid growth, superb financial ratios like high ROE, low debt/equity & interest coverage ratio, etc. The company is led by charismatic founders telling captivating & convincing business success stories. You are excited about the opportunity and ready to pay a much higher premium compared to other businesses in the same industry. However, one fine day people…