Aaditya Chhajed, CA, CFA

YOU CAN DO IT! IT’S EASIER THAN YOU THINK. No one is born knowing how to save or to invest. Every successful investor starts with the basics.  A few people may stumble into financial security—a wealthy  relative may die, or a business may take off. But for most people, the only way to attain financial security is to save and invest over a long period of time. Time after time, people of even modest means who begin  the journey reach financial security and all that it promises:  buying a home, educational opportunities for their children,  and comfortable retirement. If they can do it, so can you! KEYS TO FINANCIAL SUCCESS: Make a financial plan. Pay off any high-interest loans. Start saving and investing as soon as you've paid off your loans. What are the things you want to save and invest for? a house a car an education a comfortable retirement your children medical and other emergencies periods of unemployment caring for parents Make your own list and then thin...

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.

Regret is the most enduring emotion in the lives of most equity investors. Because sooner or later, they make the mistake of getting out of a falling equity market, only to see it turn around and rise, three years out of four, and for the rest of their lives. Some get back in much higher; others never get back at all.  This process gets repeated during the next bear market and the next. No matter: the pain of regret is with them forever. Nor does the passage of time heal the pain. If anything, time and relentlessly higher prices make it worse.  There are, after all, only two master emotions: love and fear.  When markets are falling, investors fear permanent loss; When prices go up, investors fear missing out, and envy (another face of fear)  those who seem to be getting rich. I say again: that isn't "greed". It's just a different form of fear.  Don't envy the harvest of the rich. Envy their pl anting. - Bo Sanchez. Many years ago, there was a detergent adve...

Equity markets are fundamentally unknowable. If markets and/ or investments lent themselves to rational analysis in any significantly predictive way, somebody (or more properly, somebody's computer) would have perfected that analysis long since and would have taken away all the chips of everybody else at the table. This has not happened. And if it hasn't happened by now- with every computer nerd in the washing through his computer every recorded trade since the Assyrians swapped wheat to the Babylonians for bronze- it is not going to happen. The secret is: there is no secret.  No matter how much you know, you still can't prove what's going to happen in the future. And the more you try to prove what's going to happen, the more you put yourself in an obviously false position. Once again: no one can, with any precision, give knowledge of the future. The battle we fight is not one of knowledge vs. ignorance, but of faith vs. fear. Your belief system is your sword and yo...

Points to ponder while taking investing in equity: 1. Do you travel to foreign countries like the US, UK, Japan, Switzerland, etc.? 2. Do you send your kids abroad for education? Shouldn't you balance your equity exposure to Indian and Foreign stocks/ Mutual Funds/ ETFs/ FoFs?  Reasons for the globally diversified equity portfolio: 1. Reduces country-specific risk Country specific risk includes negative events such as  war,  drought,  political turmoil, etc. 2. Winners keep rotating Winners keep rotating frequently Predicting them in advance is impossible Reduce the risk of our investors losing out when the Indian stock market underperforms   3. Reducing Portfolio Volatility All stock markets do not always move at the same pace or same direction   Investing across countries helps to reduce the volatility of the portfolio Lower fluctuations in the portfolio which also helps in better good night's sleep 4. Wider choice Several world-class companies do no...

What is equanimity? It is keeping your emotions under control.  The point is not to get excited and euphoric when things are going your way at the same time not to get depressed when things are not going your way or the environment is bad. From the year 2020, one of the lessons, I have learned is that it is difficult to understand the markets, as it is a place where people make emotional decisions. To be successful in markets, you have to control your urges. What I mean is, do not sentimental in the market. In markets; volatility cannot be avoided.  All of us crave stability and fear volatility. However, is life always stable? No. It is not. All of us have experienced the highs and lows that life has to offer. Yet, hardly anyone has stopped living due to that.  Very few have always stayed indoors merely because 'anything may happen' once they move out. Most of us want new experiences, even though we are not entirely certain that those experiences will always be pleasant. ...

There are multiple investment options for Co-operative Banks and Societies. As per RBI Master Circular on Investments by Primary (Urban) Co-operative Bank and the recent amendment to the Indian Trust Act in 2017, Co-operative Societies can invest in many financial instruments. Traditionally, the funds which are in excess of the loans given are invested in fixed deposits of other co-operative banks or nationalized banks. The interest rate received on those excess funds barely matches the interest cost that the bank pays to depositors.   After the recent amendment to the Indian Trust Act in 2017, co-operative societies can invest in specified mutual funds. For simplicity, I have divided the deposits with a time horizon of 5+ years and less than 5 years.  1. Deposits with 5+ years time horizon Only deposits with 5+ years' time horizon should be invested in equity. Purely from the perspective of value addition; co-operative societies should invest some part (e.g. 10%) of depo...

Zooming Out: You should zoom out and see the big picture. If you're too close to the situation, you'll get entangled in things that don't really matter. And, they really shouldn't matter. Go too close and you'll get caught up with the noise at the signal.   While this is true for many aspects of life, let's discuss in the context of business and investing.  When you zoom out, you'll ask questions like;  Am I even in the right business? Does it even make sense to be in this business? Where is this business headed in 5, 10, 20 years from now? What need does this business serve? Will this need even be there 5, 10, 20 years from now? For example, an auto ancillary manufacturer, let's say a gearbox manufacturer may be very profitable right now; but if electric vehicles disrupt the internal combustion engine; will there be a need for gearboxes ten years from now?   And even if the need is there, how likely is it that my business will still be relevant fulfilli...

You may contact me in case you need to ask or tell me something. I am waiting to hear from you. Stay home! Stay safe! Thank you very much for your time! With respect, Aaditya Chhajed CA, CFA(US) All Levels Cleared, MCom E: chhajedaaditya@gmail.com M: +91-9404055222. Instagram: @chhajedaaditya  Aaditya is the founder of Aaditya Chhajed Financial Advisory Services, a Financial Planning and Wealth Management Firm. He loves helping family, friends, and, clients make better financial decisions.  He believes learning is perpetual.  He loves reading books, traveling around the world. He is a commerce postgraduate and Chartered Accountant. He has also cleared all levels of CFA(US) in the first attempt.    Disclaimer: Investors should seek the advice of their financial advisor prior to making any investment decision based on this report or for any necessary explanation of its contents. Future estimates mentioned herein are personal opinions and views of the author. ...

These are exciting times. Indian Equity markets benchmark Sensex had come off from 42000 to 26000, now sharply risen to 37000. The buzz is palpable, and making a quick buck seems rather easy. We present a three-point strategy on what investors must do now. Cleanse your portfolio: Remember that sure-fire stock tip your friend told you about. The hidden gem which was supposed to be the next big story, but never quite took off as expected. Instead, it ended up as one of your worst investments. Or that trendy thematic mutual fund which your broker promised would be the ticket to your financial nirvana . But sadly, the fund failed to deliver on the return front and your broker failed to return your calls when quizzed about its performance. Now is the time to cleanse your portfolio of such investments. Rising markets provide the perfect opportunity to make up for incorrect investment decisions, and that too at a profit.  It is important that your investment portfolio is only made of aven...

Fortunes are made coming out of recessions. Fortunes are made coming out of recessions. Fortunes are made coming out of recessions. Fortunes are made coming out of recessions. Fortunes are made coming out of recessions. ...and you won't have to nail the bottom. This post might actually make you a fortune. Remember how everyone in 2010-2019 wished they had invested in the market during the global financial crisis in 2008? Well, for those who missed it, you are getting a second chance now. Fortunes are made in bear markets for those willing and able to look past the pandemic. Business disruptions: Many businesses are getting disrupted in this crisis. It's no coincidence that half of the Fortune 500 and fastest-growing companies in the world were started during a recession or bear market. I feel this time is no different; strong companies will come out stronger, far bigger, better, and creating much more wealth than in the past.  Lessons from history: The historical lesson of ever...

It's only when the tide goes out that you learn who's been swimming naked.  In an unprecedented move, due to dramatic illiquidity in certain segments of the corporate bonds, on 23rd April 2020, Franklin Templeton Mutual Fund announced winding up of six debt fund schemes as follows: Scheme Assets as on 31 Mar 2020 (in Crore) Franklin India Low Duration Fund 2,737 Franklin India Ultra Short Duration Fund 13,158 Franklin India Short Term Fund 7,093 Franklin India Credit Risk Fund 4,434 Franklin India Dynamic Accrual Fund 3,119 Franklin India Income Opportunities Fund 2,506 Total 33,048 Above debt mutual fund schemes are short and medium-term schemes. These schemes are a good substitute for funds lying idle in current and savings bank account of corporates and individuals.  Sub-categories of debt schemes:  Overnight Fund Liquid Fund Money Market Fund ...