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

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Nuggets for October 2’nd

Posted by Muthu on October 2, 2017

Some of my recent tweets:

1)If you are not leveraged, corrections or falls or even bear markets is not a cause of worry. Permanent capital is always safe.

2) In hindsight, we realise our knowledge in the past was imperfect. Same holds good for today’s knowledge. That’s why learning is continuous.

3) How we react during times of panic and negativity decides our investing fate. Failures and successes are usually made in bear markets.

4) You don’t need new ideas to keep performing well. Existing portfolio itself may be good enough for coming years. Just keep topping up.

5) As the saying goes, nobody ever went broke booking profit. But big wealth is made only by letting the winners run for many years.

6) Most of the time staying the course and doing nothing is the best thing to do. It is simple but extremely rewarding.

7) We tend to focus only on high rate of return. But time can deliver big wealth even at moderate rate of return. Focus more on time than rate.

8) Allocation matters. If you want life changing wealth, need to be overweight on equity. But also be ready for 30% drawdown anytime.

9) Accepting volatility is the price you pay for building long term wealth. If volatility troubles you, scale down your ambition. You can’t have both.

10) We focus too much on ideation. Ideas are like commodity. Available in plenty. It’s execution and staying the course which is a rarity.

11) Quotational losses are not permanent ones unless you sell due to panic. So you need to fear the fear and not temporary declines.

12) The quality of advice can be validated only in bear markets and crashes. In a bull market, everyone is a long term investor.

13) As an investor, you’ve come of age, only if you can withstand the pain and stay the course in a bear market.

14) There is no one right investment strategy. But you need to follow what is right for you, both in good and bad times.

15) No strategy works always and no investor can avoid periodical under performance. Successful ones are those who stick to their style.

16) Nothing wrong in having big goals. But need to be ready to get rich slowly over time than trying to chase unsustainable returns.

17) Would you stay invested if you get negative or zero returns for next 3 years? Be aware that such phases would continue to keep happening.

18) Stocks can make you wait for many years and give many years return even in a single year.

19) In market linked products don’t look for yearly performance. Look for what happens over years.

20) Price can lag earnings and earnings can lag price. But over a period of time, they go together.

21) The first and foremost focus in investing should be avoiding permanent loss of capital.

22) Future of mutual fund industry would be low cost ETFs, passive investing, zero commission and pure advisory model.

23) Though it sounds very basic, first you’ve to believe making it big from equities is possible. Belief leads to process, behaviour & outcome.

24) Those who try and make it says it is possible. Those who never try and lack conviction says it is impossible. Conviction is the key.

25) Never underestimate the importance of savings. Money is the raw material to make more money.

2 Responses to “Nuggets for October 2’nd”

  1. kundavar said

    very great of you to write such influencing lines.. heartfelt appreciations!!!

  2. […] 25 fine nuggets of financial wisdom (Muthu) […]

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