Successful Investing for 2019

What is success? 

Paulo Coelho famously said, “ Success is going to bed each night with your soul at peace.”

In our interaction with investors, “What is successful Investing?” is a common question we ask at the initial stages of our interaction. Most replies are; “High Double digit growth, We want to beat the Sensex/ Nifty/ Nifty small cap index etc etc and so on”

According to us, “ Successful Investing is nothing but being able to meet your financial Goals”

The goal of most investors isn't to make as much money as humanly possible and then die, rather it's for the money to serve a purpose (or multiple purposes throughout their lives), and they invest accordingly. I sit with investors every day and rarely do we have in-depth conversations about portfolio performance. Rather we define goals and needs and figure out a way to get there if possible. Paying for children's education, marrying off children, figuring out how to generate an income stream to supplement salary, creating a retirement corpus is the real measure of success and not over performing or underperforming some random index.

Everybody wants to buy potential multi baggers, talk equity and suddenly the investor starts aiming for multiplying wealth in the shortest possible time, but You must remember that, Higher returns can only be aimed at with a higher risk. 

We recently met a couple who had just sold a house and were looking to invest the proceeds. Before giving them any recommendations, I first asked them what their purpose was with the money they were investing. They told me that they were looking to buy another home in the next two to three years and wanted to use the money as a down payment. They hoped to grow the money a bit before doing so. Since they needed the money in the next two to three years, this was not money with which they could afford to take a big loss. We mutually decided it was not a good decision to take a lot of risk with this money.

Now, imagine if we had invested that money in some type of risky investment. There would be a potential upside, but what if the investment took a downturn over the next two years and they lost 20%, 30%, or even 40% of their money? They might not be able to buy the home they were planning to.

But, if their goal was to invest for the retirement corpus, 15 years away, our recommendation and investment strategy would have been totally different.

For investors real success isn't outperforming some random index, rather it's achieving their goals and needs.

There is no magic wand. The only way you can be a successful investor is not by timing the market but by spending time in the market.

There is an old maxim; don’t focus on the (R)eturn, but concentrate on the (T)ime you can spend 

invested.

The safest way of Wealth Creation is by the power of Compounding. Based on your requirement, risk appetite, time frame and years to your goal, invest in the right asset class and sleep each night with your soul at peace.

However the best route we can recommend, to successful investing, is to consult and engage a Good Financial Advisor and go through the following steps:

1.Create and follow a financial plan.
2.Decide on your asset allocation and Diversify among various assets.
3.Invest and stay invested as per your financial tenure.
4.Avoid trying to time the equity markets.
5.Ignore stock market volatility, emotions, get rich tips.
6.Look for long term compounding effect.
7.Keep realistic expectations while investing.
8.Periodically review, and re-balance if necessary.

For me the Key to Successful Investing is to Keep Your Eyes Open for Opportunities and Invest In Assets You Understand.

Be Rational About Price, Measure Your Success by the Underlying Operating Performance of the Business and Not by the Stock Price. 

Once you decide on a strategy, build your conviction through knowledge (As Warren Buffet says, " Risk comes from not knowing what you're doing") Have patience, remember that, successful investors also have fear, they have doubts and successful investors also have worries, but they just don’t let these feelings stop them. 

Shankar Sharma, the marquee investor recently tweeted, ”In markets, more than fear and greed, the more important emotion to control is regret. Didn’t buy enough at the bottom, didn’t sell enough at the top is the common remark. Control regret and you will be a highly content, happy and successful investor.”

  

To start with, Say no to tips, no to fear and greed, no to timing the market and nothing can stop you from becoming a successful investor in 2019.

In the end, financial decisions and successful investing aren’t about getting rich. They’re about getting what you want – getting happy.

May 2019 be a very “Successful” investment year for you and your family and may all your investment goals be fulfilled.

Stay Blessed Forever! 

Sandeep Sahni 

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Note: All information provided in this blog is for educational purposes only. They don't constitute any professional advise or service. Readers are requested to consult a financial advisor before investing as investments are subject to Market Risks.