It has been seen that an investor’s behaviour is more volatile and fragile than the equity markets.
The year 2018 show a spate of small budget Bollywood films with interesting concepts striking it big, but arguably the most interesting and gripping movie was ‘ Andhadhun’. Loaded with sudden twists and turns, agony and ecstasy in equal measure and to top it, there is a ‘BLIND’ protagonist (or was he pretending to be one!) who steals the show in this thriller filled with uncertainties and ambiguity!
Isn’t this plot similar to the behaviour of a new ‘Blind’ investor venturing into equity markets? It is precisely this uncertain and ambiguous mind brimming with the quest to earn quick bucks that drags him straight into a world of chaos and destruction (or can he actually make it big?)
The first major twist is within the first ten minutes of the movie, when we find out that the hero is NOT actually blind. Is this situation not similar to the individual who is new to equity market and buys penny stocks with a ‘trader’ mindset, but more often than not, ends up holding those loss-making ‘penny’ stocks as a part of his long -term portfolio. He would now like to believe that he has turned into a ‘seasoned investor’, but obviously with a bleeding portfolio.
Now aided by this ‘newly found vision’ this transformed investor in order to erase his losses, explores ‘attractive’ yet complex and vicious products such as derivatives, structured products, commodities and so on. For sure these products are beyond the comprehension of this investor, which unknowingly embroil him further in a larger financial mess.
He soon realizes that there is no ‘free and quick lunch’ in the financial world. This is depicted in the movie through various murky characters and situations that the protagonist encounters once he decides to get involved with them and which leave him completely battered.
The consequences of wrong monetary decisions and the barrage of losses coupled with turbulence in life and finances can riddle an individual with irreversible damage.
It may be good to watch this excitement and turbulence through the medium of cinema conveyed as a fictional story and get your share of thrills, but surely real life is different from reel life. The importance of a ‘proper behaviour mindset’ of an individual in his life’s investment journey is immense.
Investing with a definite purpose, stating a time duration for financial goals, selecting appropriate and easy to understand products and most importantly cutting out the noise when the markets are volatile are some of the traits which set apart a failed or mediocre investor from a successful investor.
More often than not, it has been seen that the investor’s behaviour is more volatile and fragile than the equity market. The urge to make a quick fortune in the market without proper knowledge and guidance has been the primary reason for these financial disasters. It’s time individuals understand that a long-term view saddled with ‘clear vision' is a necessity to commence your investment journey.
Finally, as we see in the climax of the movie, after all the upheaval and excitement, the viewer is left wondering whether the protagonist is playing a ‘blind man’s bluff’ or is he really blind?
An unanswered question which is left to the imagination of the viewer to draw their conclusions. Similarly, the journey of a misinformed investor can be quite ambiguous and non-productive for himself, but surely can turn out be an effective case study in business schools or end up in an article like this!(Kalpesh Ashar is a certified financial planner and founder of Full Circle Financial Planners and Advisors)You can now invest in mutual funds with moneycontrol. Download moneycontrol transact app. A dedicated app to explore, research and buy mutual funds.