They say a picture says a thousand words. The above picture was forwarded to me on whatsapp today, last day of the financial year.
I have met many people in the years that I have spent giving people advice on their finance and investment and I have noticed this.
People who love stocks love them no matter what.
People who love bonds love them no matter what.
People who love real estate love them no matter what.
And so on. You get the gist.
People get married to the instrument to maximize their wealth irrespective of the state of that industry. Of course there are certain unique features of every investment vehicle like gold, real estate, stocks which cannot be replaced. Iam not saying they are completely fungible or interchangeable.
One cannot live in your stocks, you need a home.
One cannot wear bonds to a wedding or a party. You need some sparkly jewels.
Only Stocks can compound wealth like no other asset class.
But it helps to be a bit objective about it.
My limited point is that different asset classes perform at different points in time. So it is good to bear in mind when we are making our investment decision.
This is not about timing the market. Which means trying to predict what will do well and invest in that asset class and jumping in and out of it.
It is keeping in mind that different asset classes have up & low years for many, many, many years understand some of the triggers which are working around it.
How does one learn the triggers?
It takes time, effort and some experience but everyone can do it. There isn’t any rocket science to it.
We are attempting to learn that via this blog.
One goal could be to churn and switch out of assets which are giving low to negative returns.
It may be a tough goal but at least it will force many of us to look at all the assets we own holistically at regular intervals say every quarter and take an objective call on whether to stay invested or exit.
Interesting picture which says a lot if you look at it without blinkers on.
Sejal Goel
Nice article. Keep sending.. Love to read them.. Always get to know something new.