Are you investing for Long term? Think again.

Hello Investor,

Alert – Simple Algebra required for understanding

It has been said that “Change is constant in life.” It is evident in our lifecycle. Life starts as an infant, to a school going kid, than to a college going teenager, to a family person and lastly to phase of retirement.

All phases comes with a change which we accept as human being.

When it comes to hard earned money, we question the rule of change. One must understand the importance of outperformance and underperformance. Let me explain the simple criteria considering current market situation.

  

Why Portfolio Reshuffling is important?

•      Imagine a situation of index value at 100 before Covid situation.

•      Due to Covid, Index falls from 100 to 80 (-20%)

•      At the same time, a performing scheme is outperforming index and falls only -15%

•      While an underperforming scheme is underperforming index and falls -25%

•      In an hypothetical situation, Index recovers from 80 to 100 which is 25% growth.

•      As the performing scheme fell less to 85 will become 106.

•      And the underperforming scheme fell more to 75 will become 94.

Case here to prove is loss can be recovered by patience but underperformance cannot be recovered.

Mutual fund investors must review and reshuffle portfolios at different time horizons.

Nishit Siddharth Shah

Two Months and Two stories.

Dear Patrons

Two Months and Two stories.

September 2018 – India’s GDP has grown by 8.2%. Highest in entire world. We are living in a country which is fastest growing economy in the world. Reasons,

• Increase in I.T. filling (More Direct Tax Revenue) and Consistent GST collection (More Indirect tax Revenue)
• Highest young generation among world population. Urbanization and Growth across sectors in tier II and tire III cities.

October 2018 – Stock Market in India has nosedived more than 4500 points (Apprx 12% down) in almost 1 month and investors have started to panic. Reasons,

• Crude price going up and reports that it will reach to 100$
• Depreciating rupee which is reaching almost Rs.75 now

What to do now?

• Currently Marketcap of Indian Stockmarket is 23% in discount with the corresponding GDP. As the GDP is higher, it means that economy is strong and sentiments are bad.
• Indexes have beaten down heavily. Largecap, Midcap, Smallcap are down 11%, 23% and 31% respectively. For Long term investor, Investing now is like buying Platinum at price of Silver.

Remember: There is “Regret of commissions” and also “Regret of Omissions”.

Should one not look at times of 2008 and 2013 where market bounced back at Rocket speed?

At Shalibhadra, we believe that ‘Regret of Omissions” is much greater. We don’t want any investor to be left behind in the growth story. We are actively calling investor to allocate some part of their surplus funds to allocate for Equities.

Nishit Siddharth Shah

‘Modern slaves are not in chain but in debt'

Dear patrons,

‘Modern slaves are not in chain but in debt'

The instant EMI culture is hurting the consumption oriented population of India.

The phrase ‘Aamdani Athanni Kharcha Rupaiya’ is coming true. People are spending before even earning, thanks to Easy Loan, EMI Trap.

• Loan (Debt) is available for...
• Higher Education for child – Education loan
• Business Expansion – Business loan
• Buying Appliances – Consumer loan
• Vacation Tour – Personal Loan
• Buying Home (Beyond Capacity) – Home Loan
• Buying Car (High End Choice)  – Car Loan

For various expenses you will get a loan but ever you heard about a loan for “Bette Retirement”?

Entire life is Spent as “Zindagi na milegi dobara” by spending through EMIs & it is too late when importance of retirement is realized.

At Shalibhadra, We believe that a dignified Retired life must be planned on top most priority.

Each & every reader of this newsletter must get their retirement planning done. This one page report/Financial Planning is very simple & easy to understand. Even if you have done get it rechecked.

Nishit Siddharth Shah

When you say ‘NO’, to whom are you saying ‘NO’?

Dear Patrons,

It is time to do some introspection.

When you say ‘NO’, to whom are you saying ‘NO’?

For example,

- If you ask your good friend to quit smoking and a ‘No’ from him is not of any concern for you but your friend is actually saying ‘NO’ to his healthy future.

- If a concerned father ask his teenage son to study for better career and a ‘No’ or unresponsive answer from him will not make so much difference to father but the son is actually saying ‘NO’ to his future career.

Similarly, investing through SIP is something which must not be avoided at any cost. Lo and behold, SIP is the key for systematic Wealth Creation. SIP is a discipline and winning on individual behaviors.

At Shalibhadra, We periodically send WhatsApp messages, emails and SMSs to start / increase SIP. Our research shows that many investors do Half-Hearted SIP despite the fact that it is most convenient way of investment. It is our aim that how can we encourage Whole-Hearted SIP investors instead of Half-Hearted SIP investors.

Lastly, your ‘NO’ to start SIP is not ‘NO’ to adviser, you might be saying ‘NO’ to your sound and stable financial future.

Nishit Siddharth Shah

Invest only where it is understandable.

Dear Patrons,

Why we use helmets / seat belts?
Why we have life / health insurance?

It is our constant desire to secure well being of self & family. For the same reasons, we work hard almost 40% of our life.

In contrast, we dedicate only few hours for our investment which we know that is very important. By the time that understanding come, we try to ‘cover up’ that lost returns by investing into ultra high risk avenues.

Recent case is Block chain currencies (Bitcoins). A lot of us are attracted towards it due to its value hike & past performance. The wisdom of investing in this high risk investment avenue should have come 4 years ago. Investing now is like going along the herd. Second argument is that it may be promoted by lot of intelligent people but logic says something not regulated by an authority & which is not understandable by majority of people is like firing in dark.

At Shalibhadra, we promote disciplined & understandable investment. We don’t go beyond our logic for investing hard earned money.

Nishit Siddharth Shah

Being 'Lazy', Becoming Wealthy.

Dear Patron,

Why should you bank on your luck when there is a simple plan that could help you become wealthy? Your money should work harder than you.

A simple plan called Systematic Investment Plan (SIP) offered by mutual funds can do that. SIPs allow you to invest fixed amount of money every month in mutual funds.

It is easiest and laziest way to become ‘Wealthy’…

If you save Rs. 10,000 every month for the next 20 years, assuming a return of 12% per annum, you end up saving more than Rs. 1 Crore. That's right! You can be a ‘crorepati’ and that too without literally knowing it. (Above data for information only).

All you have to do is to be lazy and Just stay invested, In the mean time, there will be ups ups and downs in equity markets which will make the value of your investments fluctuate. But here your laziness will help.

The fixed investment amount of SIPs will buy more units when market is down. The reverse will happen when the markets are up. As a result, on an average, you will end up buying units at a reasonably low cost and can potentially make handsome gains over long periods of time.

Being Lazy by investing in Mutual Funds is actually good thing.

Nishit Siddharth Shah

Plan your TAX with 'SIP' way...

Dear Patrons,

We are getting bigger & stronger, not by ‘Complan’ way. The secret is ‘SIP’.

We have recently stepped into 35th year of investment advisory at the same time we crossed 5000 SIP mark.

One word question – ‘How?’

Two word answer – Financial Planning

The earning of an individual is growing. Across India Life Standard is increasing which increases need of money to achieve various financial goals. The immediate and most important needs to be planned are retirement & child’s education planning.

Apart of goal planning, taxation is also a part of financial planning. The Government gives enough options to save taxes. If planned properly, one can easily save an ample amount on taxes. Doing job or business or professional activity is our duty. But planning of taxes is as important as business planning.

We, at Shalibhadra with strength of our 34 years of experience, find out every possible way of tax savings from your income with help of renowned CAs. We will be happy to provide you investment + tax savings related services toward peaceful journey of financial planning.

Trending or Trendsetting?

#trending

Or

#trendsetting

The world is changing and so does the trends. Thanks to technology. Through finger tips we access the world.

This excess availability of information has formatted two types of people.

Type one who follows existing trends, so they are trend followers.

Type two who set their own trends, so they set trends for others.

Above is perfectly true for Sensex followers. In Stock Market, large numbers of investor is in following a trend. So they are followers. While only few are trend setter. They are visible and vocal. They appear on TV, newspapers and through various mediums. Their influence is dominant on remaining 90% of those followers.

These trend setters have a most important quality; they are masters in oratory power. Additionally they are a good looking personality and that helps them create an impression. So people follow them.

To keep ourselves out from these trend setters, let me make things very simple. We live in a logical world and common sense will help us. Once we start analyze small happenings in economy, we can set our own trends. Here are some recent examples.

Evaluating simple economic factors a. Focussing on fundamental news and their positive outcomes, b. ignoring nonsense negatives (Our news mediums are full of negative news), c. analyzing the news inflow based on facts and not on rumours.

Initially it is tough but implanting it slowly and making small mistake at starting level, observing results of our actions can lead us to conclusion about our investment. At least layman investors can set their own trends for investments.

How to save yourself from Mis-Selling?

Cobra Post Video disclosing Anti Money Laundering Activity by some leading banks has put a question mark in my mind “Growth at cost of Goodwill”.

When “Growth” bypasses “Values”, customer’s unrest arises.  Shareholder (Owner) asks for Growth in earning. Earning comes from customers. More earning is a result of aggression in Selling means more charging or find new ways of earning. So some “Not to do” (mis-selling) is being done to achieve the target growth.

Let us discussion this mis-selling first, then we will show you the way to overcome the hurdle.

Firstly, in last ten years we have seen various new investment opportunities have been introduced in the market. Investors now have experience that more the complicated product, more the chances of wrong investment decision. Initially investors should try to buy pure vanilla product. Jumping in to market to chase returns may be dangerous.

Secondly, Investor is not serious about his/her future goals. Some survey reveals that the young generation investors are investing just to save the tax. So the basic of future financial planning is not known to even highly educate young persons. They are more aware on new ways of spending.

Thirdly, the seller is not investor centric. Either he is loyal to his employer or his sales targets. Sometimes he tries to sell the well accepted products of the market and saves himself from blame game.

SEBI, RBI and IRDA have introduced various systems for consumer complaints redressal. However we always find news on mis-selling though intermediaries whether it is a bank or even individual advisor.

The introduction of Complaint Channel is welcome move. But can we dream the world of educated investors who understand at least basics of products? Before the seller makes any selling statement the investor should learn to understand the untold facts which seller intentionally or unintentionally hides. This can be possible by education. Investors should attend “investors Awareness Program” known as IAP. IAP is an initiative of SEBI and AMFI to educate investors to understand Inflation, Risk, Diversification, Benefits of Long term investing, Goal Setting, Asset Allocation, Taxation implication, liquidity etc. By attending IAP seminars, investors can avoid wrong investment decisions. The important part of such seminar is Question and Answers session. Sometimes question of other persons gives lot of knowledge as learning from experience of others will reduce wrong investing.

We find need of such IAP seminars and have decided to arrange sequence of Seminars throughout the month of August, September and October at the various locations of Ahmedabad city.

Such Seminars will be held on “No Sales Talk” basis. Talks will be in Gujarati, Hindi, and Easy English as per convenience of participants. Industry experts will deliver lectures and It will cover all aspects where mis-selling happens. Focus will be given on wrong talks, double talks and hidden facts by seller. Important discussion point is to understand Risk, Features of various Asset class and Importance of diversification through Asset Allocation as per risk appetite for optimum return.

At the end of every IAP, We are happy to invite you to join us for dinner so that individual questions can also be handled during one to one interaction. We will be happy to see you to attend the seminar with your spouse. You have to register with us to attend the seminar. We will offer you different dates and Locations. You have to select a suitable date for you.

So friends, join us in this educative IAP seminar. You can spread this message to your friends too and let us move forward from mis-selling to smart investing.