The greatest casualty in the cause of promoting financial savings is that many people have had bad experiences or they know someone who has. So, how can they regain trust and take the first step towards a realisable investment portfolio?
In this episode of ‘Financial Quotient’, Sumaira Abidi spoke to Mahesh Patil, Chief Investment Officer at Aditya Birla Sun Life AMC and Benaifer Malandkar, Chief Investment Officer of RAAY Global Investments about tackling financial challenges.
Patil said the irony is that bad news travels faster than good news and especially in markets, there are people who have lost money, had a bad experience, but there are also are many who have created a good amount of wealth and there are success stories, which need to be talked about.
“The fact is that the market if you look at Sensex, okay, it is currently at around 60,000 or so and we know that longer-term markets have given returns in double-digits, which is well in excess of inflation,” he said.
He added that financial markets, especially equity markets are known to be volatile. They are like a roller coaster and depending on where people enter, they could have an experience but from the longer-term perspective, the fact is that the longer-term returns are very good over there.
He highlighted the need for people to plan and save properly. Instead of traditional savings products, they need to look at other alternatives, he said.
Patil noted that even for a conservative investor, who is fairly risk-averse, the risk is not participating in financial markets. “There are various ways in which you can mitigate the risk of financial markets or the volatility either through asset allocation wherein you can diversify across asset classes through proper rebalancing of the portfolio, and taking a longer-term view,” he said, and called for more discussion on these lines, which according to him, is the only way by which people will planning for the future.
Meanwhile, Malandkar pointed out that women in India are really conservative when it comes to stepping into the finance and investment world and said they need to unshackle that first and assume that they know more than what the other person knows.
“The first step would be to start small, start something that you would find simple to understand, I think that will be really good. Also, they could start at some regular intervals so instead of just putting one shot something at one particular point in time and then waiting for a result, I think to make it a monthly habit. If you can spare a certain amount of money, I think just like they would end up doing, when they make investments into gold when they save some surplus money,” she explained.
She added that according to her, the better way to approach gold would be to actually go through the ETF route or go through the sovereign gold bond fund route as that would be a real easier way for them to step in to begin with.”
Watch the accompanying video for more.
(Edited by : Kanishka Sarkar)
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