Experienced Voices

Start early to take risk for gains!

“The biggest risk is not taking any risks. In a world that is changing really quickly, the only strategy that is guaranteed to fail is not taking risks.” – Mark Zukerberg

Independence day had an strong impact on my financial journey. When I had to work on this day in 2011, I decided to move on the Path to Financial Independence: Power of Investing. Today, I am sharing the experience of an escape artist Sriram Jayaraman, who had called it quits at the age of 49 by reaping the benefits of his investing. Sriram had an MCA in early 90’s and worked with firms like TCS, Mindtree etc. He had spend his career on-sites in USA/ Switzerland, which gave him exposure to not only investing in India but global markets. His more than two decades experience of investing gave him experience to not only witness the issues like Harshad Mehta Scam, Dot Com bubble etc. Here are his learnings:

Don’t be risk averse, Accept the possibility of being wrong at times. Investing in equities is always being fret with the risk of loss. One of the fear is that if you have picked a wrong investment, you might lose 100% but people don’t realize that a right pick can multiply. During the Ketan Parekh episode, one of the investment move from Rs 10 to 1,000 and then back to 0 in short time frame[Total Loss]. Though his another investment turned over 100x in 10 years so net-net still superb gain. Starting early gives you chance to ride on winners for long.

Give time to your investments! Sometimes we are really lucky, the investments we had made can double in short time frame. These are the cases, when you don’t want to abandon those investments. The positive returns can be multi-folds, and jumping off the ship to early is as bad as losing 100% of your investments. One of his investments in early 2000s in a conservative NBFC is still there and growing with profit booking over the last 2 decades.

Bucket your investments to maintain the balance! The investments need to be balanced as per goals. Even when you have the great opportunity to invest into a risky investment, never invest your short term goals money into a risky investment option. You always segregate the Emergency investments, short term investments in the debt instruments and long term investments in mix of equity & other assets.

Sriram Jayaraman after quitting his corporate career, now has been helping other investors in achieving their financial Independence. He is a SEBI registered Fee Only financial planner, more details on his website Arthagyan.

Experienced Voices

Have Patience & Be Realistic!

“Hoping for the best is not an issue, Issue is to lose the touch with reality.”

One thing that helped me in my investment journey is learning from the experiences of other fellow investors. Investors, who have traveled the path ahead of us in their investing journey, and can share how their decisions have shaped their outcome.

Today, I am going to share the experience of Sandeep Nangrani. He is in mid to late forties, An engineer and a MBA by education. He had worked in various corporates like Godrej & Boyce, ICICI Bank, EXL Service, TCS, Oracle etc. He has an investing experience of ~20 years and have a first hand experience navigating through the earlier episodes like dot com bubble, 9/11, financial meltdown in 2007-09, Demonetization etc. In 2009, he won the zonal round of “Hunt for India’s smart investor” a wealth management show on ZEE business and successively represented Bangalore in national semifinals. (Link)

Below are some of his leanrings:

First, There is no alternate to reading. There are always things you do not know when you start your investing journey. It is imperative to have the plan or understand the basics before jumping on the investing band wagon in lure of huge profits. He has spent a significant time with magazines like Outlook Money & early websites like Value Research etc to build his foundation. Investing in any product, which you do not understand is just gambling.

Second, Having patience in investing can do wonders. Warren buffet has often mentioned that stock market is a machine to transfer money from impatient to patient people. If your cash flows are steady and the ability to invest in not hampered then you should not run away from the falling market but continue to invest or if possible increase your investments. More you invest in falling market, higher the chances of wonderful returns you have in future.

Third & last, Be realistic in your return expectations. Investing with the expectation to hit a jackpot or 70-100% returns every year is not a realistic expectation. In reality the expectation of 2% equity risk premium over the risk free investing is good outcome. If the FD returns are 8%, then 10% is a pretty good return. Make sure if you are lucky and make exorbitant returns on your investments like in the 2014 or 2017, You should book the profits and reduce the equity exposure in your portfolio.

Sandeep has recently paused his corporate career to be a full time investor and helping other people to manage their investments in an efficient manner. He can be reached on his facebook page.