Secrets of Success in Investment – 1

Last Monday was 20 of July month, we were celebrating 51st anniversary of the man landed on the Moon Surface. on 20 July 1969.

Man On the Moon

According to NASA they were knowing How to send a man on the Moon since 1962 but actually launching of Apollo 11 mission was possible on July 16, 1969, to send a man on the Moon.

Then what was the reason behind delaying in starting the mission?

Simply, NASA was not ready for risking their astronaut’s life because they were not able to take them back to the Mother Earth safely. Saying In a simple word they were preparing for getting perfection on how to bring back them safely. Mission was not about sending astronauts but visiting the Moon.

Back to earth

What could be the result if they had started the mission in 1963 only after mastering how to put a man on the Moon?

The mission could end up just like Abhimanyu

As an unborn child in his mother’s womb, Abhimanyu learns the knowledge of entering the deadly and virtually impenetrable Padma Vyuha or Chakravyuha From Arjuna. Arjuna stopped explaining Chakravyuha escape when he saw Subhadra slept while listening. As an effect, the baby Abhimanyu in the womb didn’t get a chance to know of coming out of it.

When it comes to real war As a result of half-knowledge of entering Abhimanyu managed to enter into the Chakravyuha but Abhimanyu was killed brutally because he was not knowing the strategy of coming out of that Chakravyuha.

Chakravyuha-The-most-deadliest-and-brilliant-military-formation6

Same way Most of Us have mastered in Investing via SIPs in the market and achieve such a big achievement that today MF Industry is having almost 8500 Crs of SIP book, till i wrote this blog, which is providing extensive liquidity to the market. Average of monthly SIP Book is more than 8000 Crs since last one and half year. Due to this liquidity Market was not going to correct and Market was running at peak level for a longer period. Every SIP plans were enjoying high returns but suddenly due to pandemic outbreaks, the situation turned upside down and SIPs which were the symbols of growth turned in to loss-making an investment just within a couple of months.

If we scrutinise the situation we can understand that we do not have any control over SIPs and all our SIP plans are Market Bharose. Due to that reason only our Notional Gain [11.55% / ₹ 3,96,997] converted in to Notional Losses [-4.47% / ₹ -1,00,420] Abs Losses of ₹4,77,417 from its peak who is the responsible for this situation?

SIP-Protection-7 years 04-2013-03-2020

Only one question is to be asked to our self “Was there any scope for us to save investors money?”
Most of us are thinking that the collapse was sudden and there was no sign or indicator so we could not book the profit. We often forget that market has given us so much time to book the profit but due to Greed we could not able to manage the opportunities for profit bookings. We, most of the time, misses the opportunities for profit bookings.

More or less we all MFDs/IFAs are working like Abhimanyu. We all have mastered in starting investment in equity but could not handle it properly and poorly stuck-up in between while disruptions starts in the market.

In that situation, we start using various slogans for excusing differently every time like the above mention

Earlier in 2016 when the market was in trouble we were used to listening that “We should Manage Investor Behavior” but never bothered why Investors behaviour is changed. it is obvious that Investors behaviour will be changed because Investor’s hard-earned money is on a stake when Mr. Market is doing badly. What we all are doing is like “When all the horses are escaped we are locking the stable”. After making losses, whatever it may be Notional or Real, we are trying to convince the investor that Downfall is temporary Growth is permanent. After all, when an investor starts redeeming in panic at its own we start the same feeling because this time our money is involved so we start educating client all-new lesson “DO not convert your Notional Loss into Real Loss”.

In the current pandemic situation, we use to listen/speak that “DO not convert your Notional Loss into Real Loss”. We don’t bother to secure the profit when the market was at peak nobody was telling that “Convert your Notional Gain into Real Gain” who is shouting about Notional loss theory.

If we really want to change Investor’s behaviour we should change the way we are doing the BUSINESS (Yes you have read it correctly). All of us have made our holy profession which could gain blessings of everybody getting cursed.

First of all, we all have to change our own behaviour and learn to respect Mr Market.

The only way to come out from this situation is just like NASA has done while Apollo 11 Mission, first of all, we should learn to exit before entering into the chakravyuha (book the profit at an appropriate time) to Secure Growth and Avoid Losses. Without having proper exit strategy what is happening All the Notional Gains are converted in to Notional Losses (see above the table of HDFC SIP Returns). What we should do is follow the way NASA has adopted during their Appollo 11 mission First master on safe Come Back of Astronauts on Mother Earth. We should also design the exit strategy first before starting any SIP or LumpSum Plan.

Remember our mission is not just to Invest Money but make it Safe. It’s not all about Returns but is about Returns with Safety.

Next blog we will discuss some more hurdles and solutions for Secretes of Success in Investment – 2

WHAT IS STOPPING IFA FROM BECOMING A LIMITLESS ADVISORS?

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Know More: BLTP – The NeXT Gen Investment Strategy

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