Wise Wealth Advisors

D.Muthukrishnan (Muthu), Certified Financial Planner- Personal Financial Advisor

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Memory

Posted by Muthu on March 7, 2012

I just sent a sms to few people this morning and put the same as comments in a blog as well. 

Felt like sharing the same with you. 

Generally we all believe what we want to believe. I’ve conviction or bias about equity as an excellent long term investment. I’ve always found it like binary or enlightenment. Either people get it or won’t.

Incidentally I happen to see and read lot of analysis and forecasts on recent political results on markets. Though it is fun to read all of them, they are utterly useless:-) Markets are politically agnostic-whether it is Congress or BJP or Third Front. Our memory often fails us, though I’m saying below out of my memory:-) which need not be 100% accurate.

The strongest leg of last bull run happened when UPA-1 was in power with day to day bickering by Left. Nobody would have forgotten the weekly breakfast meetings, constant threats and common minimum program.

Out of the 6 years of BJP rule, 3 years were marked by bull and another 3 by bear market- 50/50!

Between 1980 and 1990, markets almost multiplied by 10 times, when socialist government of Indira Gandhi was in power (due to loan melas PSU banks NPAs went as high as 16%) and this was the period when she was assassinated, Punjab burned, government and parliament was crippled for 2 years due to Bofors scandal, a motley crowd of political parties with extreme ideologies formed a functionless government, with a politician like Devilal who had subzero knowledge on economy, governance and administration calling the shots.

Markets have a mind of its own and follow its own cycles which are influenced by innumerable things. Our memory is always short and we take every near term event seriously. As I said, fun but utterly useless and it may be damaging to one’s portfolio and hence financial health.

We’ve every right and freedom to follow short term movements, forecasts, events and pundits explanation on them and keep timing the market. Some times we may be lucky but mostly it would be at our own peril.

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