Diwali is here and we have some
really great words of wisdom from many investors and advisors on investment strategy
and on behaviour patterns required to be successful in investing and reaching financial
goals.
The avalanche of news
articles, advertisements along with lower returns from traditional investment
avenues that guarantee returns have prompted many to seek out newer products. Many
of you are new, first time investors, shifting tentatively from FDs to investments
that give market related (not guaranteed) returns.
The most common places for information
we go to are news articles, opinion in the finance pages, TV channels. We do get some really great information from here but truly useful information is hidden among a lot of rubbish. Unfortunately much of what is bandied about is exaggerated, inappropriate and I
find many getting utterly confused on what to do. More importantly, they make
you feel you are missing out and lead you to hara-kiri.
Another person who freely dishes out information
is that Bank “Relationship Manager”. I’ve personally never seen so many untruths
being spoken as when I hear a Relationship Manager speak about an investment.
His/her only relationship is with the money in your account which may have come
from a matured FD.
So, what should investors do?
First
– take some effort to move from darkness of ignorance of financial instruments
towards the light of knowledge
Spend some time learning
about various financial instruments, how they work and what you can expect. Such
information does not come from the questions on in newspapers or on CNBC asking
“Which is the best Fund?”. Neither will it come from WA forwards on investment
tips. It requires some time to read relevant books on investments and simple financial
primers explaining various instruments.
An investment in knowledge pays the best
interest. This learning does not take too much time and only requires some
interest and commitment on your part.
Second
– seek advice and learn
While I was addressing a large
group on personal finance – a group of about 80, only two persons could
answer a question of mine on how a mutual fund worked. If you don’t know, it
makes sense to seek advice, have someone to guide you and teach you. Your
advisor, guide, financial mentor can keep you focused, impart his wisdom. Wisdom is more than just knowledge about
financial instruments. As I hinted above – right at the start, your behaviour,
your reaction to various events, attitude towards finances can be changed which is the most important factor
in attaining financial goals.
While many of you have
entered the markets for the first time in this bull run and have had a great
experience in the last four years, it is
imperative that you are aware of what you are getting into and enjoy the ride, with the light of knowledge
guiding you in your path to financial freedom.
I wish you all a Happy
Diwali, healthy and prosperous new year and success in your journey to
financial freedom.
असतो मा सद्गमय । तमसो मा ज्योतिर्गमय । मृत्योर्मा अमृतं गमय ।
