What an IFA should do now
Many IFAs have got in touch with me recently…a little worried about what is happening in the market. Here is some generic gyaan on what they can do:
- Explain to clients that NOBODY, nobody, knows what is happening in the market
- Nobody can say that a market went down by 332 points out of which 118 is because of international factors, 88 is LTCG tax, 43 is currency, and the balance is…..Such a break up happens only in the mind of a journalist.
- IN life your investment returns has a lot of element or risk, and a lot of element of luck.
- Taleb says we underplay the role of luck.
- If you bought shares in 1977 (expecting to pay full tax on dividends) and partly on capital gains, it was in 1992 that dividends were made tax free. It was in 2003 capital gains was made nil. So if you are going to sell in 2034, let us worry about the tax laws in 2034. The current 2018 is just a station that you pass by in a fast train. Stop worrying.
- Normally you see the obstacles ONLY because you took your eyes off the goal!
- If your goal is 8 years away, why are you worried about market gyrations of 2018? makes no sense.
- Give your portfolio some time and give yourself some nice deep meditation. It helps.
- One of India’s best investors – Vallabh Bhansali – is a Vipassana Meditator.
- Stop reading the MSM. Most of their headlines are click baits.
- Study well, get a good job, save well, insure well and let the fund managers create wealth over a long time
- Read point no. 11, it will remain the same in the year 3032 as well!!
- Investing is simple. Do not complicate it for yourself. Trust the professionals to do that for you!!
- Read investment books if you want to understand equity investing, not watch television.
- Reduce cost of investing. Minimize it.
- Don’t cringe talking to an IFA – I have seen some IFA falling at clients feet for explaining things!
- If your client has a portfolio of Rs. 25Lakhs booking Rs. 1L profit a year will help. If he has 7 crores, it will not matter.
- An accurate research report by a good analyst dated Jan 2017 is worth more than a badly made report dated Feb 2018. Accuracy more important than recency.
this is enough right?