Monday, 1 September 2014

The Bird of Gold

I live in a country where most of the people thinks that the Future is prosperous. Indeed Future seems prosperous from this stage where the new government is working with full ‘Josh’.

Human Dream Machines are spinning with full hopes.

India is known as – ‘Sona Ki Chidiya’. The country is going to feel the change it has never felt before. And I decided to postpone the idea to move to The USA – Just because of two gentlemen, Prime Minister and RBI Governor. In next few years (10-15 years) India is going to move beyond your imagination.

But very few Indians are known to it and going to participate in it.

Just wanna to explain simple example, Indian Finance Minister budgeted the amount of more than Rs. 37,000 crore on Infrastructure. But ultimately who is going to get benefits! Companies related in infrastructure industry. These companies are going to expand their balance sheets. But what the common man is getting from this FM’s step. Not Much. He is not participating in progress. Now, to participate in these companies there are two ways. First, be an employee. Second, invest in these companies.

You got the first way, right! The second says, either you become owner of these companies by investing in equity (direct or indirect) or you fund these companies for their projects. 

Now, the very important thing of this example is, if you will not participate either ways, you will not be a part of a new era – you will be drag down to the inequality gap and middle income trap theories.

As an investor and advisor too, I am fully aware about the risk in investment markets, but if we will not take this risk we will be exposed to the much bigger risk - ‘Inflation’.

FII (Foreign institutional Investors) are dumping their money in India and participating with huge margins, but Indians are still unknown. Invest in Equity.

Before Investing you need to get one question outstanding. Till when I need to be invested? Or What is my Future goal? Once this question is clear you need to pick investment products accordingly.

If your horizon is for 10-15 years, and you have decided to go with MidCap Equity funds, you better stick to your goal and investment vehicle. One thing is crystal clear, equity is going to go up and going to fall, but it does not matter - it is not going to stay there. For example a scheme of a Mutual Fund – ICICI Prudential Value Discovery Fund – Regular - Growth fund’s NAV was Rs. 12.88 in 2004, In 2007 NAV was Rs. 37.90. But in 2008 crisis NAV fell to Rs. 17.22 and bounced back to Rs. 40.53 in 2009. Currently, in 2014 Fund’s NAV is Rs. 96.99. [Source: Value Research] If we had withdrawn in 2008 then we definitely made a Loss. But my goal was for 10 -15 years. And currently we are getting a CAGR of 25.35%.

In current scenarios Indians are earning far better incomes. But please do not put them lying in worthless investment products [investment products giving return less than 8% or Inflation].

Be Savvy for your Own Hard earned money. Park it in a right manner with right investment vehicle.

Choice is Yours!


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