Those were the days when Fixed Deposits were returning an interest as high as 15% and along with PPF and RBI Bonds were good avenues to invest in. The Mutual fund market comprised of UTI and a few banks till 1993, when private players were introduced into the system.
1993 was also the year, at my age of 36, when unforeseen circumstances ate away all the savings I had. Life was starting afresh. Accustomed to investing in FDs and RBI Bonds, every Rupee I had to spare would be put away in these. The urge to make a “quick buck” on the stock market was alluring. Coming from an Engineering background, with practically no financial background and going by hearsay, all that I thought would make me the “quick buck” resulted in loss. Live and learn it is said. So what was the next step?
My endeavours had taught me a few things and over the years I have learnt these the hard way –
- Patience – I knew if I acted too quickly, I would get burned. I had to learn how to think long term as getting rich overnight was, as I learnt, just a dream.
- Risk Assessment – What was my risk taking capability? Did my life’s situations permit me to be a risk taker and to what extent?
- Learning – Knowledge about investments apart from FDs and Bonds was lacking and it became evident that awareness of what was happening in the ever changing scenario of the financial world was needed. I am not saying I understood it all but it did help in differentiating one product from another. With time, I realised that it was to be a life-long learning.
- Discipline – There had to be a system, a commitment, to invest regularly and systematically, even at the expense of forgoing some luxury. I knew that my goals would be met only if I persisted with my investments and stuck to a plan.
- Getting Advice – Aware of my financial and investment management shortfalls, I needed advice. As providence would have it, around 2001, I met Lovaii Navlakhi, a colleague in HDFC Standard Life Insurance, who started an investment advisory and management business. We managed to identify and assess, as mentioned above, my risk-taking ability which, in turn, justified the discipline and patience that was required from me to gain reasonable financial stability. My first investments in mutual funds were made with his guidance and the rest, as they say, is history.
Today, with vehemence I can say, the traits that I have listed above have got me so much closer to achieving my goals.