I have a Mutual Fund (MF) portfolio that I initiated in 2024. The porfolio has been selected based on a few assumptions - to achieve returns of 15 to 17 % over a 7 year term. This journey is underway. I would like to now consider myself an "aware investor". The desire is to graduate slowly to be an "informed investor" and possibly one who also gets to successfully achieve his objectives in the next few years. Not that I am any wiser now, getting to be aware of the changing landscape of financal economics has been eye-opening & a tad adventurous for me.
I belong to a generation where the formative years of adoloscence and early adulthood has been in a conservative setting - of all kinds - where savings was a virtue, utility economics was akin to sustainable living, spending on wants was a luxury / taboo. The decade of 1990 - 2000 was disruptive to our generation in more ways than one. For the many who were rooted in the protectionist economic ecosystem - breaking free into the new found landscape of opportunities was disruptive & transformational. One of the positive impacts of this disruption was a blossoming financial well-being of a swathe of humanity. However, allegorically put - you can take a conservatist into liberal zone - but one cannot rid the conservatism out of him. So the likes of me, struggled to find resonance with the change - which reflected in our personal investment journies as well.
My MF journey has been chequered. Many years ago - in 2015 - I was a passive and indifferent investor. This is also a 1-1 reflection of my personality in real-life as well - which I think manifested into my investing journey. However I was by & large diligent - to have been a conservative, upper-middle class value systems. This conservative species is one which has only a pay-check as source of income. The value-system reflect in savings behavior often mistaken for retirement planning and investing. After a very modest conservative journey into savings - I have ventured into MF investments - that too as a passive investor.
Typical Passive investor behavior - Today's passive MF investor is an informed passive investor - as he knows what is passive investing. It is "his investment that is governed by the principles of passive investing". The typical passive investor of my era (I do not want to incur the wrath of the fraternity here) was "investor being passive to investment selection". Investment wisdom and choices were mainly delegated to an "advisor" - not because he / she could be wise enough - but simply because the likes of the "passive me" were indifferent and unwilling to understand the nuances of personal finance. My era of small investors were "less literate in personal finance". This topic is of deep personal reflection for me - I do not intend to go into that pit at this time though (sic).
My passive investment journey was reasoably good. It lasted from 2015 to 2020 (onset of COVID). My portfoio was in 4 to 5 funds , 2 in ELSS (Equity Linked Savings Schemes) catetory and others in varied funds. The mode was SIP (Systematic Investment Plans). The MF assets were choiced by my advisor. I did not put any wisdom into it. Over the years, I seemed to have realized reasonable gains of about 16 % YOY (Year-on-Year) returns of my portfolio, This has managed to help me cover some rainyday scenarios in COVID & job changes - and also helped me with some liquidity to cover the expenses of wedding of my daughter. I would not credit myself for the MF performance - as my illeteracy in personal finance used to make me inherently indifferent and reluctant to see the status of my portfolio performance. It is to my good fortune that funds did reasonanbly well. Not that my reviews would have contributed to better performance (LOL), my awareness would definitely have helped get wiser to "stay invested" in my portfolio - than to liquidate all. I would have possibly found ways and means to stay invested in my 5 year journey - till date - which would have possibly given me better expeirence & been more rewarding as a consequence. I would have stayed invested in a portfolio that was nurtured with discipline. My lack of awareness of investment principles - and my inertia of being grounded in conservative investing methods (which were out of sync with the ongoing transformation) and a lack of openness to new ideas - became the foundation of my choices and decisions in this phase.
Literacy in Finance - Over the years I developed a yearning to understand the subject of Finance and Economics. I felt that, apart from having a colloquial knowledge of finance - it is important to formally study the topics. I had the opportunity to take up an Executive MBA program between 2021-23 & complete it. I majored in Finance. It was an exciting experience to learn Finance from professionals. Having taken up school after 30 years of work experience - it was exotic to come across a fraternity of educators and teachers. Their teaching and interactions have helped me to connect the many dots, answers a host of unspoken questions and above all allowed me to synthesize my understanding to a new level. It also helped me to face a number of my learning limitations - with humility - inturn motivating me to carve out new goals for the times to come. Behavioral Finance has been a very important and exciting take-away for me from my MBA program.
Now - At the vantage point that I am in, in life, the above experience is helping me to take a fresh look at Investing - a prism through which one can see financial security and self-sufficiency with confidence. I have begun my investing journey with this newly acquired awareness. It is modest, organic, built on the principles of fundamental investing. I hope to continue this journey judicously.
Overtime, my goal is build my knowledge, incrementally, to managing my portfolio, understand a techniques of rational research of the Assets in play, get better at analysis of markets etc. I also intend to maintain a journal of this journey, so I capture learnings, collaborate with like-minded friends & fmaily to make this experience rewarding in more ways than one !!
Dear Anil Sir,
ReplyDeleteReading your reflections was truly inspiring. It’s rare to see someone with your experience approach learning and investing with such humility and curiosity. Your journey through the Executive MBA and the clarity it has brought to your financial decisions is deeply motivating—even for those of us working alongside you. It’s an honor to be part of your financial journey, and I’m excited to see where your continued growth and thoughtful approach will take you. Wishing you all the success and satisfaction you truly deserve!
Warm regards
As Anil rightly said about the conservative brought up in families and also in academics until year 2000, my though process was always stocks & MFs are risky having heard about Harshad Mehta, Ketan Parek, Satyam etc., I never dared to invest in stocks or MFs. Always gone with FD & RDs. But realized that I missed many opportunities only after the bull markets rise post covid and started learning about investing. Appreciate Anil sharing his financial knowledge, fundas and acumen gained in his executive MBA program.
ReplyDeleteRegards
Tc