Aaditya Chhajed, CA, CFA

What investing behaviors undermine investment performance? Following nine investing behaviors that can undermine investment performance. Active Trading:  An investor using an active trading investment strategy engages in regular, ongoing buying and selling of investments. This kind of investor purchases investments and continuously monitors their activities in order to take advantage of profitable conditions in the market. Active trading generally results in the underperformance of an investor’s portfolio.

I want to talk about the five things that virtually everyone I speak with is trying to achieve with his/ her money. Some people have only one of these goals. Some have two or three. And, not infrequently, I meet people who, with a little prompting, turn out to have a bit of all five. And since these five issues are the main emotional and financial concerns in my own and my family's life, I can effortlessly (and quite genuinely) spark a tremendous amount of empathy on this topic and so can you.  The Five Great Goals of Life are: The endowment of a long, comfortable, and totally worry-free retirement, with no compromise in lifestyle, and no real concern about ever running out of money. The need/ desire to intervene meaningfully in the financial lives of one's children , during one's lifetime, and/ or in the form of legacies. The ability to fund, in whole or large part, the education of one's grandchildren. The capability to provide quality care to parents in their later ...

I recently read the book- The Psychology of Money by Morgan Housel, Timeless Lessons on Wealth, Greed, and Happiness ;  the most intriguing investing book I have ever read. Top 20 learnings from this book as follows: Financial success is not hard science. It’s a soft skill, where how you behave is more important than what you know. If you are short of time jump directly to points 19 and 20. 1. No One’s Crazy Your personal experiences with money make up maybe 0.00000001% of what’s happened in the world, but maybe 80% of how you think the world works. Spreadsheets can model the historic frequency of big stock market declines. But they can’t model the feeling of coming home, looking at your kids, and wondering if you’ve made a mistake that will impact their lives. The economists wrote: “Our findings suggest that individual investors’ willingness to bear risk depends on personal history.” The New York Times wrote in 1955 about the growing desire, but continued inability, to retire: “...

“If you’re not staying on top of your money, you are putting your financial well-being at risk.” – Suze Orman, American financial advisor, author and podcast host. Getting more education, pursuing a career, combining employment with family life – these are just some factors that have enabled women to enjoy greater financial independence, earn more, and save more as a result. In my list of family, friends, and clients, women investors comprise not more than ten percent. However, on average, due to some positive traits, the results of their investments beat that of men. Below mentioned are some of the traits. Let's reinforce them!  1. Stick to the comprehensive financial plan In my experience, once you set the right return expectations, educate women on risks involved, explicitly mention them in the investment policy statement, they stick to the same financial plan unless the goals change. Traditionally, women have cult towards physical gold and real estate as preferred ...

How many of you would have thought of the lockdown due to COVID 19? The importance of emergency funds has never been apparent. Recently I read,  65% of home buyers expected to default on their installments . Well, events like COVID 19 are extremely tail events.  Nassim Nicolas Taleb in his book "The Black Swan: The Impact of Highly Improbable" defines a Black Swan is a highly improbable event with three principal characteristics: It is unpredictable It carries a massive impact We explain it in such a way making it less random Why we do not acknowledge the phenomenon of black swans until they occur? By nature, humans are not hardwired to learn specifics when they should be focused on generalities.  We focus on things we already know and time and time again fail to take into account what we don't know.  Just imagine - what if lockdown is extended to a total period of three months? There arises the need for an emergency fund. In this blog - let's ...