Surprised? Well, considering that investor behaviour resembles that of herds, it does not sound all that unreasonable. After all, in 2001 we found it hard to convince them that it was worthwhile to invest in equities. Now in 2008, it is hard to tell them to put their funds in other places too! While on that theme, let us look at everyone’s favourite Aesop fable – that of the Hare And The Tortoise. We all know how it goes – they participate in a long race that had signals and signposts along the way to guide them. Many were keenly interested and followed it on a daily basis. The hare shows no inclination to get started – he feels he can catch up anytime. On the other hand, the tortoise gets going and keeps up a steady pace. Along the (investment) route, many spectators tell him that boring things like asset allocation and SIP were meant for “ordinary” people who had no risk taking abilities.

He gave them an all-knowing smile and chugged along. He used his rest breaks to read, and carefully read all signals/ signposts so he had a clear picture of where he was headed. The hare on the other hand, could catch up in no time; but he went off to explore detours, and basked in public glory. He found three advisors – anyone who had a ‘product’ seemed to find him. Before he knew it, he had IPOs, NFOs and three e-broking accounts, and no clue why he had them. He discovered that he may be fast, but the financial detours he took needed a long time to get out of.

Spectators and reporters constantly compared the two and inevitably, declared Mr Tortoise the boring one. “Mr Hare is going places and has big ambitions. He has big holidays, a bigger house,” they would say. Tortoise would think about his portfolio – cement, hotel and car shares. Stocks and mutual funds gave it a big boost, along with SIPs and Ulips. Funnily in the investment world, Tortoise was realising that his portfolio was being fed by the spending of Hare. He chuckled.

And so he plodded on, knowing who the winner of this financial journey would be.

Lessons learnt

* Keep at it every day. If you have a SIP, pay installments regularly. If you say, ‘It is my wife’s birthday this month, so let me skip an installment, it could lead to a habit.

* Look at the bigger picture. Car, house and vacations are expenses. It is assets like shares, bonds, mutual funds and Ulips that put cash in your hands. So when you see your friends and colleagues chasing after those luxuries, smile a knowing smile and chug along, much like the tortoise. Chase a bigger retirement corpus instead.

* Set up our own schedules, discipline, targets, etc. The spectators and reporters around you may not know what is happening in your life. Ignore them.

* Look for and appreciate the spontaneous shortcut, but ignore those that make you deviate from your targets.

* Draw a balance – don’t hurry so you miss sane advice, but don’t be so free that you listen to everyone with a product pitch.

* Know the difference between advice and noise. Advice is what we chase, noise is what chases us.

A very good comment a client of mine made to me once – “I like my tailor, he measures me whenever I go to him.” Similarly change your plans, asset classes and products as you change in life. It helps to work to a plan. Start early, drive sensibly, reach safely – makes as much sense for investing as for driving.