Aaditya Chhajed, CA, CFA

You don’t have to be a genius to achieve your investment goals. But if you’re a knowledgeable, disciplined, and confident yet humble investor, you’ll end up looking like one.   Follow these 12 Principles and you're set for life with regards to your investments. Develop a financial plan: Identify your goals and design an investment program to reach them. Be conservative in your projections. Become a disciplined saver: Learn to live below your means. Make it a habit to put away money every month. If you aren’t naturally disposed toward saving money, find   ways to trick yourself, such as automating your savings program. Start early and continue: Continue investing in both good and bad times. Focus on your Net-worth: How much of the net-worth is liquid? Return on net-worth is more important than return on investment. Control costs: Avoid instruments with a high expense ratio. Manage risk: Create a portfolio that will enable you to sleep peacefully at night.   Be a buy-a...

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. ...

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: “...

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...

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...

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 ...