Today’s episode is all about – New Year and New investments and how to get on the path of doing it right.
Hrishi K: Hello listeners, welcome to NSE Presents: Invest – O- Cast (An exclusive investor podcast) Powered by MoneyControl. I'm your host Hrishi K and this brand-new podcast is all about getting your money to make better investments for you this New Year.
2019 is here and you must have made all the plans, goals and resolutions for it to be your best year yet. A lot of us are still indulging in retrospection and re-evaluating some of our decisions from the years gone by. Well I tell you this, now is the best time and the perfect opportunity for all those who have failed to start making the changes that they said they would make next week, next month, or perhaps when winter starts.
Well, now’s your chance to sit down and prepare a list of important lifestyle and financial changes you want to make, and being the caring bunch that we are here at Invest – O- Cast, we’ve decided to give you a bit of help – because since the majority of people fail to stick to their resolution, all the help you can get will go a long way.
And while you are at it, we are going to help you carve out the best way to make money work for you this year. Because, a little bit of financial planning, a little bit of education, and learning good habits this new year can put all of us on the path of achieving our goals in life and our goals in life!
National Stock Exchange (NSE) with the help of Invest – O- Cast (An exclusive investor podcast) Powered by MoneyControl is committed to break the limitations of geographical boundaries and reach investors across the country. Today’s episode is all about – New Year and New investments and how to get on the path of doing it right.
And to do this in the best possible way for you, we have with us today Mr. Ambareesh Baliga, he is experienced in different facets of the market for over 35 years.
He is currently an independent strategy advisor to a few mid-sized corporate. He also provides equity advisory to a few Ultra High Net worth Individuals and Family Offices. In collaboration with MoneyControl, a leading Investment Portal, he offers a subscription based service called "Game Changers".
Welcome Mr. Baliga! We are really glad to have you here today and fantastic to see you how you doing?
Ambaressh Baliga: Thank you Hrishi and again thank you for having me here for this podcast.
Hrishi K: I am going to start to get our audience to know a little more about you and the efforts that you put in behind financial education and awareness.
Ambareesh Baliga: See I have been in this field of investments for about 35 years like you said, I initially worked for groups like Kotak during their initial phase and then closed to about a decade with Karvy, others like Way2Wealth and Edelweiss before actually starting off on my own. In the last 3 decades I have witnessed a gradual shift in the stock markets from opaqueness to a lot of transparency. In those days again I am talking of the 80’s and the early 90’s it was quite difficult to get hold of annual reports of the companies you wanted to invest in, even for rates we had to have a hot line with the broker and we still weren’t sure whether the rates which we are getting from them were correct or not and today we have everything at our finger tips. But at the same time the huge mass of people who have the same information as you have has multiplied, so now it is a question of how you interpret the load of information you get. So right now I would say, I mean against the 80’s and the 90’s and today so the shift has been from getting the information to interpretation of information. I think that is how things have changed over the last so many years.
Hrishi K: Beautifully put, we all welcome data in every walk of life but how much information is too much information is all is the right question to have.
Ambareesh Baliga: Absolutely! And how to pick the right pieces of information from that whole mass and interpreting it I think that is more important today and that is what takes you out of the crowd.
Hrishi K: Very well put. Since today is all about New Year and New investments, we would like to know some of the things that you as Ambareesh Baliga have planned to do this year in terms of your investments and finances and obviously our listeners can take inspiration from that and sort out their financial lives so let’s go.
Ambareesh Baliga: In fact I continued to be a bullish on equities; I mean though it is an election year we could witness a lot of volatility. But as long as we have a stable government one can remain bullish on the economy as well as the markets and this is exactly what we have seen in last whatever 6 or 7 elections. So my allocation to equities remains the same. However in the recent past we have heard of so many corporate defaults, because of which I would possibly look at shifting part of my dead portfolio, in mutual funds to bank fixed deposits which is supposedly boring instrument but in times like these it is a good capital production instrument.
Hrishi K: Well, this is very interesting I have not heard the terminology fixed deposit in a while right? Everybody is so fixated about getting money out of fixed deposits. There are very rarely do you have somebody giving some traditional advice. Now would you say the lead up to the election and a little later and then you can again start deploying those funds?
Ambareesh Baliga: Absolutely, I mean fixed deposits would be a temporary parking of your funds because it clearly gives you that capital production which is barely required at this point of time.
Hrishi K: Very well put. NSE Presents : Invest – O- Cast (An exclusive investor podcast) Powered by MoneyControl is all about helping people learn about their finances on the go…and we must have some advice from Mr. Ambareesh Baliga for the listeners on today’s topic of New year, new investments. So Mr. Baliga let’s talk about 5 new and innovative ways of making the most of this New Year in terms of investments. Let’s have the first bit of advice from you.
Ambareesh Baliga: The first advice I would like to inform all the investors that there is nothing called free lunch in this market. Either you pay directly or you pay indirectly through your losses. Generally what I see is whenever I go for a number of these investor meetings, the first thing they ask me is what is the tip, that’s easiest thing for me to give it could be the right tip for the time being but in case things go wrong they don’t have anyone to come back to or check out. So my suggestion to people would be that they should try and do some research on their own and MoneyControl provides you enough data and information for one to read up on investments and understand whether the said investment is suitable or not. Even when you see a research report do not follow it blindly, read the arguments, find out whether it is logical, whether it meets the investments goals and only then you should invest, because if you know where you have invested then I think that confidence in that investment ensures that you don’t panic when things go wrong.
Hrishi K: Actually that is very beautifully put when the information is available at our finger tips it is aching for us to just read and just go through the basics and it is not rocket science contrary to what people believe.
Ambareesh Baliga: Yes, but then generally people expect that I invest in the stock market and I should make money without much of an effort. Making money takes a lot of effort.
Hrishi K: Very well put. Ok let's go to the second bit of advice for our listeners what would that be Mr. Baliga.
Ambareesh Baliga: Investment in fact is a very personal choice. What suits me, it need not suit you. For example I am a contrarian investor which means that I look at a sector or a stock which is out of favor. I check out whether we could see some green shoots soon, if convinced I go ahead and invest. This type of investments requires a lot of patience, the green shoots could take longer than expected, the stock may not perform when the rest of the market is performing but when it does it is remarkable because the market is discovering a new story. Now this type of investment may not work for someone who likes a lot of excitement on daily basis, he is eager for action, checks his profit and loss on daily basis, so one needs to find out through trial and error what type of investment suits your personality and based on that plan your future investments.
Hrishi K: So beautifully put, so it is not just about the numbers and the data it is where personality and psychology also comes into play and I have a sneaking suspicion that you’re your third bit of advice will add on further into that.
Ambareesh Baliga: Absolutely, in fact generally people say that either you should invest based on fundamentals or based on technicals but I believe that equity investment is more a game of psychology than purely fundamentals or technicals. Fundamentals are tools which helps you in decision making but decision making depends on your frame of mind. Say for example 2 people have bought the same stock with the possible target of 160, they have bought it at 100 and it comes down to 60 one of them panics and exits despite knowing the story very well. The other sees it as an opportunity and doubles the quantity at 60 rupees and finally when the stock moves to their target level of 160, see where each of them stands.
Hrishi K: Correct, so let's go to the fourth advice for our listeners.
Ambareesh Baliga: So I would continue with the previous question which we are discussing, the mind frame, so in fact the mind frame is affected by a number of factors including your lifestyle, your relationships, generally whatever is happening in their life etc. But one important factor which affects your mind frame from an investment point of view is your risk appetite, something which you discussed in the previous podcast with Santosh. You should always know the quantum of risk you can afford to take. Most of the people wrongly gauge the risk appetite and take a bigger bet to make a quick buck and then panic when things go wrong. So along with this the other thing which I would like to also say is that don’t put all your eggs in the same basket, have a higher proportion of investments in segments which you understand but at the same time don’t ignore the well tested segments which provides you high levels of capital protection. Just like the fixed deposits I spoke about, the real estate to a certain extent, gold and things like that.
Hrishi K: And finally, the fifth and final bit of advice that you would like to share with everybody who is listening to this podcast.
Ambareesh Baliga: And I would say that this could be the most important piece of advice. Investments are made so that it aids your lifestyle; your aspirations to buy assets etc. during your working years as well as post that during your retirement. We also like to leave behind investments for our loved ones but in that process many of us forget that we need to leave a will or ensure that proper nominations are made. So irrespective of age or health condition we should always ensure that at least the nominations are in place and if possible a will.
Hrishi K: It is surprising that you would say this without taking any names, we lost a friend recently and his wife had to go from pillar to post, to get the investments in orders simply because the nominations were not put in place and all it takes these days to filling up a form.
Ambareesh Baliga: Absolutely it is so simple but if it is not done the amount of troubles your heirs will have to go through is mind boggling.
Hrishi K: Yes and it is really not worth it.
Ambareesh Baliga: Yes.
Hrishi K: Friends, we have had some really insightful bits of advices shared by our guest Ambareesh Baliga today and I am going to take you through it quickly in our “Wisdom in the bank” segment. The five things that help you make the most of the New Year and new investments are
Advice 1: No free lunches.
Advice 2: Investment is a personal choice.
Advice 3: Equity investments are more a game of psychology.
Advice 4: Don’t put all your eggs into one basket.
Advice 5: Please put your nominations in place and don’t forget to make a will.
Well Mr. Ambareesh Baliga I just realized there is so much that we can do by just being aware and investing a little bit of time and a little bit of the wisdom to make sure that we make 2019 the best year thus far for ourselves. Thank you so much for joining us.
Ambareesh Baliga: Thank you! My pleasure.
Hrishi K: So, let’s not be lazy and work on our investments a lot more than last year to make sure that this year becomes the best year yet and when it comes to our finances and investments. I am taking a lot from these bits of advice and I'm sure you will do too.
And that is a wrap on our show NSE presents Invest-o-cast! I'm your host Hrishi K for the NSE Presents: Invest – O- Cast (An exclusive investor podcast) Powered by MoneyControl. To know more about our podcast, log on to moneycontrol.com and visit the podcast section. In case you would like us to address any of your investment queries on our show do write into us at: firstname.lastname@example.org. That’s email@example.com. You can also reach out to us on Twitter @moneycontrolcom or Facebook @moneycontrol.com , do remember to use #nseinvestocast
Thank you for listening!Disclaimer - The material on this show is for informational purposes only. Please consult a financial advisor before taking any financial decision.