Pearls of Investment Wisdom
Now, after many years of experience with so many so called advisers and
experts on investments, I have arrived at the following conclusions! Sorry if these
offend some of you. I am open to any counter arguments or points from your side
and can also share further details if any of you ask.
1. FX trading: My advise: No, Never. If you still want to try it, do not invest more
than say 10% of your wealth and be sure you are ok to lose it all. I haven't come
across anyone who consistently makes money through this option.
2. Equity or stocks or Mutual Funds, whether India or US: here be ready for
long term. Do not invest more than say 20-30% of your wealth. As in point 1
above, be ready to lose it all! If you are not comfortable losing any money, keep
3. Long-term savings plans or retirement plans or kids education: the
monthly commitments or premiums can become quite burdensome. The so-
called advisor who's actually a sales guy will tell you 'market conditions', it's for
the long-term etc...but best to keep out of US$ based long-term plans for most
Indians, as quite simply if your job goes do you pay the US$ premiums or your
living expenses. Do you want to default on your own investments and lose your
hard-earned money? Avoidable...
If you still want to invest, take these long-term plans in INR and monitor them
closely and regularly.
4. Life-insurance: of course take it...preferably in INR as for a us$ cover you
might face the same issues as for the long-term saving plans described above.
5. Medical insurance: while if you are working, your employer provides you this,
but you cannot afford a separate one in US$ (for reasons in point 3 or 4 above)
and Indian insurance companies generally won't cover you as you are NR!
6. Bonds or so-called Fixed income products: we are attracted to these as
bank FD's give very low returns and the same investment advisors (actually,
sales people) want to tempt us here. But, here your entry price could be high and
you lose at maturity or the Bond issuer defaults as has happened with so many
'big' names in the past!
My advise will be don't put a substantial part of your wealth here either as you
7. Keep your money in lottery products for the long-term where hopefully, your
capital is safe, e.g., National Bonds, Mashreq millionaire, ADCB Millionaire
Destiny, FAB Savings certificates, etc. Here also, do some prudent checks: like
are they government backed for example...so, do you want to take the risk or for
what amount of investment
8. Bank FDs: no sales guys like this, and they've told all of us these rates are so
low. But Friends, better to get low return on capital, rather than no return of
capital as above!!! Keep maximum funds here...choose your Bank wisely as here
also there have been a few hiccups with some prominent names
9. Real estate: Only invest in a property after doing your thorough home-work,
where you also will be willing to stay in the future, if required. Investing, thinking
prices will appreciate might not always be a wise move. Do factor in the time-
frame, investment, paper-work, location, price appreciation or depreciation, forex
conversion rates, etc…
Best of Luck!
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