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  • MF News What successful IFAs are doing with their money

    What successful IFAs are doing with their money

    Cafemutual speaks to two successful IFAs to find out how they are managing their personal finances in these volatile times.
    Pallabika Jan 17, 2012

    Cafemutual speaks to two successful IFAs to find out how they are managing their personal finances in these volatile times.


    Vishal Merchant, Partner C1 Advisors, IFA from Surat

    Outlook for equities and debt market for 2012 – He feels that equity market may not correct as it has almost reached historically low valuation and the major concerns from inflation also look under control.

    He is very optimistic about the Indian equity market at these levels also and believes that anyone who invest at these levels and holds for three years, will get above average return.

    He sees a good opportunity in debt market too because if the interest rates start reducing, it will impact prices of bonds and long-term G-sec funds. “It is a good time to get into the debt market because if someone invests at these levels, he will surely get good returns if he holds the investment for two years.”

    Broad Asset allocation – He maintains an 80 (equity) – 20 (debt) asset allocation. In the current volatile market, he has not made any changes to his portfolio. In fact, if given a chance to make any changes, he would increase his allocation to equity.

    He describes himself as an aggressive investor who holds his equity investment minimum for 10 years, as all his investments are linked to his goal. He reviews his portfolio every six months in a stable market and quarterly in a volatile market. “I believe in investing through SIPs and have been doing it for long. I have never stopped my SIPs, no matter what the market conditions are. In fact, I have increased it whenever my cash flow increased,” says Vishal.

    Do’s and Don’ts for investors:

    Do

    • Investors should focus on long term goals
    • Investors should have SIP in their portfolio because SIPs will create tremendous amount of wealth over a period
    • They should talk to the advisors and educate themselves;if they do so, they will never make impulsive decisions

    Don’t

    • They should not go after products which promise huge returns in a short time
    • Do not ignore inflation while planning for long term goals as it will result in erosion of capital
    • Never ignore one goal in life – retirement planning

     

    Surendra Kumar Bagaria, IFA from Kolkata

    Outlook for equities and debt market for 2012 – He believes in not predicting anything about the equity market because he says that everyone is clueless about its movement. “It is very difficult to say which way the market will move.  But we need to believe that just as the market has gone down, it will come up.”

    He feels it is a good opportunity to invest in debt market to fulfil relatively short term goals.

    Broad Asset allocation – He is a hardcore equity investor and parks 100 percent of his investment in this category in a bull run, but withdraws some cash during volatile market and puts into debt. He changes his strategy according to market movements but he follows his financial goals.

    He is an aggressive investor and believes that only equity investment can give high returns provided they are held for a long period. “You should not panic when the market is low, because during a bull run the equity investments will give you tremendous returns. I constantly invest in equity and do not believe in timing the market to invest.”

    Bagaria reviews his portfolio every month to note the performance of his investments.

    Do’s and Don’ts for investors:

    Do

    • Continue your investments according to your financial goals
    • Invest through SIP and increase its percentage whenever you have disposable income

    Don’t

    • Do not try to time the market
    • Don’t be sentimental in taking investment decisions, be logical


    Related Story: What successful IFAs do with their money – Part II

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