The last 15 months of unprecedented pandemic schooled us many valuable lessons. Investors aren’t sleeping over the investments anymore. Lockdown has taught us to be more Financially Independent, Prudent and Savvy.
Some of these below mentioned learnings, I haven’t seen in my 2 decades of wealth building journey for my investors. Unprecedented demand for clarification on performance and underperformance of their investments. Rolling returns and Risk assessment. Complete profile of products, which otherwise wouldn’t have asked me to furnish.
Sugar coated investments are passé. The icing and decorations are not making one drool anymore, instead they are replaced by quality, texture, taste, aroma and brand.
I am under constant pressure to scale up my knowledge, deliver according to the fancies, innovate 3 times a day, and pick an “about to fire up” script from the stocks market on an hourly/daily/weekly/fortnightly/monthly basis. Charts of many “on fire” shares are send to me for “next course of action”.
“Push” products became “I Want This” ones. FD investor is looking for Cryptocurrency. RD investor wants Sector Funds. The best part of these changes in investors is the satisfaction I get knowing that they are following me and my team studiously and religiously.
The trigger to write this blog came when one of my clients asked me to protect his profit on investments. He is a newbie, willing to learn and adapt to my style of working. He started investing just few months back and had seen crazy ups and fearful downs. He is sitting on Absolute Return of 5.75% and growing at an Annual Return of 46,21%. I sum up this phenomenon as the 9th wonder of the world – Volatility. Since I have to be creative in putting my point across, I thought about using a court drama based analytics’.
I must say these kind of inquisitiveness and ponderings are the fundamental tenets of wealth building. We also call it constructive conversations. Here the Profit is standing trial for performance. Prosecutor is the Client. Defense Attorney is the Wealth Manager. Presiding Judge is The Chair. (Not me but my thoughts)
Prosecution’s Argument: Milord, Mr. Profit has performed beyond the universal laws of logic. It is therefore request your kind consideration to book Mr. Profit and put behind the bars of safety.
Defense Attorney’s Argument: Objection Milord, my client be addressed as Mr. Investment and not as Mr. Profit based on his performance.
The Chair: Objection Sustained. Please address the litigant as Mr. Investment.
DA: My client, Mr. Investment is a juvenile. Performance and non performance are part of his daily life. I plead your consideration to give more time to show the real performance. It’s too early to syphon off the meagre amount that you have seen. I am sure my client will perform better and produce sustainable profit in the years to come.
The Chair: Silence please. After hearing both arguments, I would like to quote these two judgements which stood the test of times and wisdom. These two infographics be used as benchmarks to determine the quality of wealth creation vested in Mr. Investment. It is to be noted, the time that has to be given for “Too True To Believe” performance is key. It has been proven beyond doubt that holding it longer with volatile profits and losses turns out to be more fruitful than constant tinkering.
Both case studies are my own. My Skin in the Game stand.
If I have to summarise, Stay As Long As Possible, without losing the practice of fiscal prudence.
Saving is like a seed. When we plant a seed under the soil, it feels dirty, soggy, dark and smelly. Then, slowly the magical life takes birth. Small and tender roots and leaves gives the trunk the strength to grow bigger. That fruit bearing, shade providing tree is actually created by that small seed.
These are my dispositions. I am here to help you see a different perspective. Every is view is correct, second opinion gives you a better logical conclusion.