Equity Investment

Lack of central KYC hinders market participation

Harsh just spent an idyllic week trekking through south west france. His tour organiser could put this together so well because the basic infrastructure already exists. Things like complete Geo marking of every square meter, availability of licensed hotels and taxi services who actually follow the licensing conditions & general cleanliness allowed them to build and deliver excellent packages on top. His article in the Business Standard drawing an analogy to an investors journey where the lack of a basic infrastructure like a centralized KYC has meant that 20 crore indians are involved with crypto/online gaming platforms with real money, but only half as many have demat accounts, and less than a quarter invest in MF.

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Index fund or ETFs? Compare total cost

Harsh’s article in Business Standard on how a fixation on expense ratio has led to a preference for exchange traded funds over comparable index funds among some investors. In the case of ETFs the NAV is only of guidance value and the market price paid by investors buying the ETF is higher than the NAV and the investors selling the ETF is lower than the NAV. The difference between market price and the NAV imposes an additional cost. Besides, there is brokerage fee, which amplifies an ETF´s tracking error
Hence the tracking error based on market price is way higher than the tracking error of comparable index funds. The incipient movement towards Fund of Index funds across asset categories has been the inadvertent victim of the hastily introduced tax amendment targeting debt funds in the last budget. Hopefully we should see this corrected in the next full budget and index based FoFs will play a pivotal part in passive investing in the future.

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Have realistic expectations from your investments

Clients are always amazed when we tell them that looking at how the investments have fared for them is not the right way to review their continuance or otherwise. Using cricketing analogy Harsh explain why looking at moving long term performance of the investment vis-a-vis its peers is a much better way to review the continuance of any investment – rather than the performance experienced by them. In fact the focus on reviewing investments (reviewing the performance of the selected batsman) takes the focus away from reviewing the performance of the entire plan itself. Harsh’s article in Business Standard.

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Wealth creation is simple but not easy, requires discipline

“Sleep well, eat healthy and exercise regularly” are the “simple” rules that enable a healthy life. However it is not “easy” to follow these simple rules. Similarly wealth creation has simple rules which require discipline and patience. Most people prefer complex solutions in their search for faster results and it takes a dedicated coach to keep them on the path (pardon this bit of self promotion for our profession). Harsh’s article in Business Standard. Your comments welcome as always..

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Mad money: Indulgence that keeps you disciplined

Harsh learnt a valuable lesson when implementing his lifestyle modification regimen – allowing himself controlled amount of cheating on sugar helped him to stick to his otherwise disciplined diet plan. This article in Business standard is on how he used the lesson in his investment advisory practise. Your comments are welcome.

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Assess your advisor on long-term performance

As an advisory firm we get asked by prospective clients about the indicative returns that they can expect. In this article in business standard, using cricketing analogy, Harsh explore why that is such a counter productive question. The headline is a little misleading. Assess your advisor by how comfortable you feel on your journey towards achieving your financial goals – not by how much returns have been achieved. There is no use achieving high returns if your goals are not achieved. Comments welcome

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Move from debt to equity, but gradually

Harsh really love this article written by him that appeared on Thursday March 19, 2020 a few days before the single day Junta curfew imposed on Sunday March 22, 2020 and the covid lockdown that commenced from Wednesday March 25 , 2020. I vividly remember the atmosphere during that time and the pall of fear and uncertainity surrounding everything that we had always taken for granted till then.

The atmosphere was such that one doubted long held principles in the face of the completely unprecedented situation. I am proud of the fact that the introspection under tremendous pressure helped him to decide to stick to his pre set rules . Now in hindsight the article makes me appear prescient 🙂 but it was a scary ride at that time. As He wrote – courage is not the absence of fear but the ability to act despite the fear 🙂

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