My exposure to financial investment started when for the first time, I bought debentures of Reliance Petroleum in the early decade of the ’90s in Mumbai. I had very little knowledge of the equity market then. While I religiously used to go through the “bhav” copy of listed BSE equities, my academic filtering of the stock based on fundamentals did not result in any significant gain for me because of the prevailing information asymmetry in the market place. But one thing was clear, I was slowly and steadily learning the nuances of equity investment in my early days.

In the second half of the ’90s, I moved to the US as part of my IT job. Little did I realize that it was one of the most eventful decades in the financial history of the United States when a significant amount of wealth was created and destroyed. My interest in finance allowed me to interact with some of the best financial minds in the US as part of my MBA program. As Y2K was coming closer, the dot-com bubble was building and every company was renaming themselves with the prefix “e” and getting listed at huge valuation. A 15-year-old digital media company with very little hard asset “AOL” buying 38-year-old mass media company “Time Warner” with a valuation of $165 billion was unheard of in the past on the Wall Street. The portfolio of every person invested in the market was defying gravity. However, come March 2000, the dot-com bubble had burst and the gravitational force was in full sway. By October 2002, NASDAQ had dropped by 78% from its peak of 5,048 points to 1,114. In the carnage that ensued, I was lucky enough not to lose my shirt. This made me realize that the herd mentality is not always good and in the long run equity price will follow the valuation. In 2003, I decided to move back to India for good for personal reasons.

Back in India, my interest in personal finance and investment kept growing. In spite of being in the IT industry, I would not lose any opportunity to take financial education sessions for my colleagues and Leadership Team. This resulted in increased financial awareness among my colleagues, friends and family who reached out to me on a continued basis for my advice in an unofficial capacity. On the market front, I had become relatively more mature and my investment was largely through stocks with a bias towards large-cap. Then came the Jan 2008 crash but I was relatively wiser this time. I decided to sit tight and recalibrated my portfolio by getting rid of the dogs. Post 2009, I was not getting enough time to research individual stocks, I slowly migrated my equity exposure from stocks to mutual funds. Before the 2014 general election, I had a bit of a hunch that BJP would come into power; hence, I increased my equity distribution in the overall portfolio.  The massive majority win for the BJP in 2014 provided an added booster to my portfolio.

Today, we are at the fag end of 2018. The US market 10-year-old bull run is showing fatigue, BREXIT is complicated, oil prices are volatile and the trade war between the US and China is putting a brake on global growth. In India, the government has introduced various structural changes including deregulation of petrol and diesel prices, DBT, demonetisation, GST, RERA and IBC. This is going to keep India in good stead in the coming years but the investment by the private sector has not picked up and jobs are still belying. In the run-up to the 2019 general election, there will be policy paralysis and the risk of populist commitments persists but I believe this will give us a good opportunity to position our portfolio.

So, what is my learning from my 20+ years of financial and wealth management experience. There is no substitute for self-education for personal finance and wealth management. Even to choose an advisor, you will need to know how to select the right advisor because that will be the most crucial financial decision you would have ever taken in your life. Awareness about your financial status, financial goals and how you are going to get there is important. Beyond that keep it simple – Reasonable diversification around asset class aligned to risk profile with a return that can beat inflation should be the way to go forward. Plan for periodic review of portfolios but avoid daily monitoring instead give time to yourself, family and friends. While awareness of investment options is important, the undue attachment and monitoring of one’s portfolio may result in sub-optimal decisions. Remember it is the time in the market, which is important for wealth creation.