Hornmerchant's BLOG

Sometimes, few (very few) clients ask me why I don't give them transaction access to their investments with me. They feel, it's their investment (money) and they have birthright to have transaction access to their investments. They feel, like their bank gives them internet & mobile banking, debit card, cheque etc and enables them to freely operate their account as they wish, I should also give full transaction access to their invesments. Few (very few) other clients feel, I should "co-create" their investment portfolio taking into account their understanding & assessment of geo politics & its impact on economy & market, their views on the 'trends' in the market, their view on how the pandemic is going to play out and impacts the economy & different sectors and so on. They feel this 'obviously' because of their vast experience of 2+ years in stock market, they have made great returns and found a knack of investing in the market. F...

Yesterday a student doing some project on Mutual Fund Performance Analysis, reached out to me for sharing my inputs. While replying to her, I felt this is in fact the matter of the title of this article – Efficacy of Performance Analysis. For me, actually this is a frequently faced question or situation, though not in exact words; clients, prospects and DIY investors seeking ‘little help’ (is that ‘DIY’?!) want a hack of choosing winners by looking at past performance. Investment comparison portals kind of make it more attractive and look easy-peasy task by giving “Star” ratings to schemes based on past performance. I am just reproducing my reply letter to her. Dear Sister, The title of your project “ Performance Analysis of selected Mutual Funds as an Investing vehicle for an Individual ” itself,   and hence the set of objectives, is put together inappropriately. Performance analysis should not be the basis (at least primary or main basis) for Mutual Funds being inv...

I was giving a lecture to final year MBA students. I asked them, what are the ways of earning money. Obviously they had lot of answers. But I asked why don't they think of money earning money? They obviously guessed that I was talking about 'investing' and they agreed, yes, that's also a way. Then I asked "between you and your money who will earn more money, say after 10-15 years from now?" Everyone said, they themselves will be earning more than their money, obviously as I guessed. Leave alone students, most people, including parents of many of the students, even with decades of work experience have a situation that they earn more than their money. So, most people 'vouch for the fact' that they are better earners than their money. That's because they worked hard for money and never let their money work hard for them! I can give you many examples. Many bankers working hard for banks save their money in Bank Deposits than buying shares of t...

Here are the simple things that matter more than what you think, in your wealth creation journey. How much you save matters more than how much you earn. How much you invest (from your savings) matter more than how much you save. How long you invest matters more than how big you invest. How you perform (behave / manage) with asset classes and markets matter more than how the asset classes and markets perform (behave).