It is not how well you can read the spreadsheets, but how you behave towards investment that matters, says Deepika Asthana.
Let us start with a story of two investors, neither of whom knew each other, but whose paths crossed in an interesting way. Mrs Sharma was a primary school teacher where she worked for 35 years till she retired at the age of 60. She lived a comfortable, yet humble life till she died at the age of 80. On her death, her extended family was shocked to learn that she had left ₹3 crore to charity. How did a woman with such a meagre salary manage to accumulate such a vast sum of money?
On the other hand, there is Mr Kumar, former vice president at a leading investment bank. A success by all counts, he had a flagrant and debt-riddled life style. On his death, he was bankrupt and left outstanding claims for his family. How did a man who had accumulated such a vast sum of money in his lifetime die in penury?
The answer would be intuitive to most of us. While Mrs Sharma followed a judicious approach to investing and let the power of compounding spin its magic, Mr Kumar did just the opposite, relying on heavy borrowing and illiquid investments. But how is that a woman with basic education and little exposure could invest better than a better educated, more experienced man?
Bias is inherent
The answer lies in their behaviour and approach to investing. Traditional economic theory will have you believe that investing is all about the study of finance, numbers and spreadsheets. However, investing is not necessarily about how much you know. It is also about how you behave and react to the information and knowledge that you have. “There is a tendency sometimes to get unduly influenced by our own investment experience,” believes Sandeep Jethwani, Managing Partner and Head of Advisory at IIFL Investment Managers.
Vidya Bala, Head of MF Research at FundsIndia. com, says: “There are some biases that are unique or specific to Indian investor.” According to her these biases include:
Bu hikaye Outlook Money dergisinin July 2018 sayısından alınmıştır.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber ? Giriş Yap
Bu hikaye Outlook Money dergisinin July 2018 sayısından alınmıştır.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber? Giriş Yap
Tax Reforms: What's In Store?
The government is working on reforming the existing Income-tax Act, 1961. The impending reforms have raised many questions in the minds of taxpayers. Will the old regime and deductions be done away with? Will it really simplify your life? What's the need for these reforms? We try to answer these and other questions regarding tax reforms
5 Questions That Will Lead You To The Right Financial Planner
Choosing a financial planner is not as easy as it may seem. Besides the right credentials, you should also consider things like the kind of services you will be needing-tax advisory, estate planning-as well as the fee structure. Here are five questions that will help you choose the right planner
Health Insurance Sub-Limits
Sub-limits in health insurance are restrictions placed by the insurance company on the SP maximum amount they will pay for specific expenses that are part of the total hospital bill.
Delayed Gratification, Humility, Understanding Inflation And Risks Key To Financial Success
The journey to financial success is continuous, requiring patience, education, and disciplined decision-making.
Avoiding Common Pitfalls through Asset Allocation and Multi-Asset Investing
Just as you track the calories and nutrients for a well-balanced diet, you need a balanced portfolio that has multiple assets to balance the risks and returns.
Mutual Funds for Financial Growth
Mutual funds allow you to invest in small amounts and seize the compounding growth, and experts help tackle volatility and asset allocation, making them a potent tool to create wealth.
Multi-Asset Investing is The Financial Equivalent of A Well-Balanced Diet
Just as you track the calories and nutrients for a well-balanced diet, you need a balanced portfolio that has multiple assets to balance the risks and returns.
Theme and Triumph: How Thematic Funds Can Boost Your Bottom Line
Thematic funds target high-growth opportunities in various industries and economic sectors, allowing investors to participate in future-focused segments to generate long-term returns.
Wealth Creation Through SIP - The Slow & Steady Road to Success
For investors seeking to create long-term wealth, SIPS are a powerful tool that enables regular, disciplined investments to generate compounding returns.
Tuition Fee Varies Among Countries
I am 22 years old and have recently started working in a software company.
