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Cafemutual recently announced the winners of the Cafemutual Big League Awards at Cafemutual Confluence 2023. Notably, Kolkata MFD Mukesh Dokania took home two awards, Equity Champion - All India and Equity Champion - East in the individual MFD category for registering the highest net-equity inflows not only from East India but also for India.
East India includes Odisha, Jharkhand, Bihar, West Bengal, Sikkim, Assam, Meghalaya, Nagaland, Manipur, Mizoram and Arunachal Pradesh. Equity inflows comprise net inflows from pure equity funds, aggressive hybrid funds and balanced advantage funds.
The Cafemutual Big League Awards aim to acknowledge and celebrate the relentless efforts and business achievements of MFDs. Powered by CAMS, the awards have identified 26 champions across five broad categories - SIP, equity inflows, new folios, fintech player and overall business, purely on quantitative performance during the FY 2022-23.
MFDs, at times, find it challenging to make investors comfortable with the changing market dynamics and the related volatility. However, apart from explicitly explaining the associated risks, equity champion Mukesh has three mantras to seamlessly explain that volatility doesn’t matter over the long run.
As on March 2023, Mukesh managed Rs 650 crore of AUM, Rs 250 crore higher than the previous financial year. These assets comprise around 25% in equity and 60% in hybrid (largely in aggressive hybrids).
Here are the three mantras.
Point 1 - Use real-life stories backed with actual numbers to illustrate the potential of equity investing
I share real-life stories of existing clients along with actual numbers. I illustrate how investing in equity over the long run has been fruitful for them. Of course, I maintain confidentiality while discussing these details.
When you use real-life stories backed with actual numbers, it gives more weight to the conversation and somewhere also boosts the trustworthiness.
Point 2 - Give relatable examples to demonstrate the importance of long-term horizon
Having a long term horizon is the key to generating wealth over time. However, explaining to them the need to have a long term horizon is not as easy as it sounds.
I use some examples. I draw analogies from the business gestation period for an entrepreneur. Just like any business takes a certain time to reach a stage where it starts generating profits, the same is in the case of equity investing where you need to exercise patience and hold on to it tight.
Likewise, in the case of a salaried employee, years of dedication and hard work lead to promotion; on similar lines discipline and patience lead to the desired corpus over time.
Point 3 - Educate about the pros and cons of available modes of investing (direct equity and mutual funds)
Investors have the choice to either invest in stocks directly or through MF schemes. Being a stock broker and an MFD, I talk to investors about the pros and cons of both models.
Direct equity demands more time and close tracking. It thus makes sense in the case of veteran investors having an in-depth understanding of the equity market. However, a mutual fund is a better option for investors having a general understanding of equities. Managed by professionals, equity mutual funds are suited for investors with limited equity skills and time.
And, in the case of mutual fund investing, I guide salaried clients to invest through SIPs that align with their monthly earnings. On the other hand, since most of my HNI/UHNI clients are entrepreneurs, they usually invest lump sum or through STP.
