Ashish Modani- Founder of SLA Financial Solutions at Kanoria college for a workshop organised by The Economic Times
https://economictimes.indiatimes.com/mf/analysis/dont-look-for-short-cuts-to-create-wealth/articleshow/67652717.cms
How to maximise returns? Ashish Modani, Founder, SLA Financial Solutions, a leading financial advisory firm in Jaipur, remembers the question very well. In fact, he spent most of his time answering the question or various versions of it at the ET Wealth InvestmentWorkshop in Jaipur held on January 18.
“I had dealt with this point in my presentation, but I kept getting more queries about the same from the participants,” says Modani, who conducted a session on Behavioural Management – Why it is of utmost importance in wealth creation.
The queries or different versions of the same question revealed the strategies many participants thought would help them to maximise returns. For example, a participant wanted to know why Modani emphasised on the importance of investing for long term, when one can get out of the market after earning good returns even in the short term. “Why shouldn’t I shift my good profits from my mutual funds to bank FDs,” she asked Modani.
Modani explained to the participant that how she is stopping her money from growing by taking the money out. “Pulling out money when the markets are down or pulling out money when you earn a little return – both destroy the growth of your money,” Modani said.
Another participant said she chose NPS over mutual funds because NPS was cheaper. Since costs of NPS were considerably lower than mutual fund schemes, she thought NPS would help her maximise profit, the participant said. “Then why is NPS not giving better returns than mutual funds,” asked Modani, before proceeding to explain the basics of investment choices.
Modani explained to the participants at the workshop that their goals should dictate where they should invest. “If I am saving for my child’s education, the asset class will be different if that kid is six years old or when she is 16 years old. You are here to chase your goals, returns facilitate that. If you chase returns, your goals will go for a toss,” explained Modani.
Ashish Modani also told the participants at the workshop that often investors earn less returns than the returns made by a scheme because of their lack of discipline or because of their fear of losing returns over a period. He cited the example of Fidelity Magellon Fund. The scheme made a return of 29 per cent, but the average return made by investors were around 7 per cent during the same period.
“Instead of looking at past performance of investment if investor were to look at the past performance of the investors and do not make those mistakes, they will be benefited,” said Modani. “The most successful investors are either dead or have forgotten about their investments,” he added.
Okay, that all sounds great, but please suggest the best scheme for my long-term goal, a participant asked Modani. Modani said many investors are always looking for sure-shot way to make wealth, but there is no short cut to create wealth. “When Sachin Tendulkar made his record, nobody said that it was because of his bat. Similarly, an investor’s behaviour and discipline towards his investment make him rich,” said Modani. He reiterated that the key to wealth creation is: “start saving, stay simple, don’t complicate your investments, think long-term, be regular with your investment no matter what happens in the market and stay focused on your goal.”
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