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

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No one knows

Posted by Muthu on January 26, 2017

Happy Republic Day.

Though we are in the profession of planning, we believe that more often reality can be completely different from planning. Planning is only a road map which needs to be modified subject to changes in life and financial situation. It is wiser to plan keeping in mind that future would always be unpredictable. Planning at best provides a direction to move forward.

There was almost a consensus that demonetisation is bad (at least for short term) for corporate India and hence for markets. However the Q3 results are far better than expected and the markets are now at pre-demonetisation levels.

Again the consensus was Brexit would not happen. It happened. Then the opinion was Brexit would be too bad for stock markets. But markets went up.

Likewise Trump was predicted to lose. He won. Then the forecast was markets would tank. Instead the markets roared.

This shows the difficulty in predicting events and even if the events are predicted correctly, it is still difficult to ascertain what reaction it would have on markets.

When it is difficult to predict our own future, we still try to keep predicting every macro factor which is influenced by innumerable factors. The whole system is so complex, more complicated by emotions of people, change in one variable can have unpredictable impact on the whole.

Not that I don’t have opinions or views. It is very difficult to plan without them. But I realise that an opinion is only an opinion even if it is mine. It is not sacred because it happens to be my opinion.

That’s why I focus more and more on what we can control. We can control how much we save, asset allocation, having patience, reaction to volatility and corrections, less tinkering with portfolio, self discipline and so on. We’ve no control over macros, interest rates, market levels, commodity prices and future returns.

Future would always be unknown and uncontrollable. Nothing can be taken for granted.

No one knows though everyday many claim to know.

So let us focus on what we can control and move forward, one step at a time.

2 Responses to “No one knows”

  1. Ajay said

    Simple yet powerful…

  2. Murty said

    You do have a Beautiful Mind. This is not just to praise you, but you have a “Manas Sarovar” kind of clarity.
    Thanks for the article.

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