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"Unless you can watch your stock holding decline by 50% without becoming panic-stricken, you should not be in the stock market." - Warren Buffet.

These words spoken by the investing legend has proved to be true in the present market conditions. The past two decades have seen a few such times of uncertainty and market crashes. Beginning with the dotcom bust in 2000, quickly followed by the 9/11 crisis in 2001 and later the global financial crisis in 2008-09. Time and again, the message to equity investors has been clear.

• Equity markets carry unforeseen risks.

• Markets can be highly volatile in the short term.

• Over long periods, equities are good wealth creators.

These learnings have been reinforced in the current markets. However, for many new investors, especially millennials who have started investing in the past decade, the temporary crash may have come as a surprise. It would be perhaps best if we set ourselves in the right mindset, attitude and expectations. Here are a few things that you must remember with equity investing…

Focus on basics:

Risk comes from not knowing what you are doing. Before starting with equity investing, it would do us good if we understand the asset class properly. Equity is not recommended for everyone and it has to match your risk profile and investment objectives. These are the prerequisites of equity investing and the next step is deciding on your asset allocation. A properly diversified portfolio with proper adherence to asset allocation over time is a very basic principle and strategy for portfolio management. Apart from this, starting early, choosing the right product for the asset class and investing regularly are other basic points one needs to follow. Stock selection and market timing have been repeatedly flagged by experts as futile as they cannot be practised accurately and sustained over long periods of time.

Long-Term:

How much is long-term? Many investors might be wondering. This is really a subjective question and there is no right answer. At times, market crashes can potentially wipe out many years of growth. Looking at returns during such temporary times is not the right thing to do. History has shown us that there are much more ‘positive’ or bullish investors than ‘negative’ or bearish investors by nature. That's why we find the bronze sculpture of the ‘Charging Bull’ or the Wall Street Bull standing on Broadway in the Financial District of Manhattan, New York City. Thus, markets have remained in bull and or neutral market phases much longer than bearish phases. Thus, the probability of profits increases as you increase your horizon. For many, long term is anything over 10 years but every wise investor agrees that it must never be below five years.

Conviction:

Investors who demonstrate conviction, especially during market corrections, have a big advantage over those who do not have such conviction. Typically equity assets change hands in markets when such conviction is tested. Your buying at lower prices means that someone is selling at those prices, booking losses or forgoing future profits. That is the cost of not having the conviction that the person is paying and you are benefitting from. As Indians, we are blessed to have a growing economy with huge potential for growth over the next few decades. It is destined to emerge as a global economic powerhouse within our lifetime. Equities should give us the opportunity to participate in that growth.

Patience:

“If you aren’t willing to own a stock for ten years, don’t even think of owning it for ten minutes” - Warren Buffet. Patience is simple yet very difficult to practice. In a fast-paced world, we expect that our investments too deliver returns within a year or so. Most investors become impatient quickly and either redeem or move their investments if returns are not visible soon or if there is a correction in prices. There is absolutely no need for ‘active’ portfolio management for long-term wealth creation. Many studies point out that it is not very helpful to do so. Only those investors who have patience, stay invested with conviction in equities will emerge successful.

Courage for Action:

All the world’s knowledge and wisdom is futile unless it is put to use. Many investors, in spite of having all the knowledge and even guidance from advisors /experts, fail to take timely and/or required action when needed. The courage to back your conviction is the last impediment to success as an equity investor. Investors to be really successful, have to back their basics, long-term investment horizon, conviction and patience with ‘meaningful’ action to get ‘meaningful’ results. Going forward, we would do well to stay put and perhaps even increase allocation in a staggered and disciplined manner.

Conclusion:

We have summarised almost all the key points necessary to be reminded at current times. We believe that the uncertainty is still not over and we may expect subdued and volatile markets with low economic growth in the coming months. We must stick to basics, not panic and follow the disciplined approach to investing. Covid-19 has made us realise our weakness as humanity and also showed us a mirror in many aspects of our lives. Let us take the investing experience also in our stride and put it to good use in future.

“He that is good for making excuses is seldom good for anything else.” - Benjamin Franklin

Most people have many reasons 'not' to invest. Even those who do save, little is saved in new investment vehicles. A large part of the income is understandably spent on meeting needs, repaying loans and leisure/entertainment only a very little part is left with most of us. However, many have adequate income today to invest meaningfully. It is really unfortunate that even then people find excuses not to save and invest. In this article we will talk about the most common excuses people have to avoid making investments. Most of these excuses are ungrounded, not true even though the person may believe them so. will also unmask the fact and truth behind these excuses.

I Don't Have Enough Money

This is the most common reason quoted by people. Let us dissect the truth behind it.

• You can start with any amount: When we say we don't have enough money do we have an amount in mind? Most people do not think of what amount they can invest and hope that they will start saving once they have enough. However, this is futile exercise and quite often it only delays your savings till you regret it. To be honest, there is no minimum amount for saving and you can even start by saving Rs.500 per month if the intent is really there.

• You can always prioritise spending: Those you find it difficult to save would be better off having a closer look at where the money is being spent. It can be quite surprising how much you could save if you would only be paying attention. Petty expenses on dining out, movies, ordering food, impulsive shopping online, etc can go a long way when diverted to investments. Only the right intent is needed.

• It may because of lack of intent: Intent or rather the lack of it as we now see is perhaps the true reason you have the excuse of not having money. Surely, those who despise saving and believe in only living to the fullest in life openly declare their lack of intent. It may suit you if you have enough wealth to retire and take care of your family. But what if not? Surely, there has to be a balance and a good reason and space for the intent to save.

• If you can't save, it is an alarm to talk to your advisor: If you have the genuine intent and still do not have adequate money to save, there is a severe problem. You need to consult a financial advisor to really understand your financial situation and guide you further.

I Am In Debt

This can be a genuine excuse which is not impossible to handle. Let us see what we can do if you find it really hard to save because of huge debt.

• You need to have a plan: The first thing you need is a better understanding of your situation – how much you are earning, how much you own and owe, what is the cost of servicing each loan and so on. Perhaps the plans can unravel ways you can still manage to save a bit by cutting corners in other areas.

• You need to pay off expensive debts: It is also advisable if we can dilute some of our assets and pay off expensive loans and find space to divert the EMIs saved towards real savings and wealth creation.

• You may restructure the loans: When you think things have reached a point of no return and it is impossible to manage your affairs, there is still a way out. We would suggest you restructure your loans, leverage your good credit rating to negotiate with the lenders. Perhaps there may be a way out still, if you really wish to pursue it.

I Don't Have Time:

Call it procrastination, laziness or just simple lack of interest. Lack of time is a common excuse. Let us unmask the truth behind this.

Why this may not be true?

• Account opening is now digital: Gone are the days of physical transactions. Now everything is digital and so is the first step is to open an online account. Thankfully, the account opening process is entirely online. You may chose the right financial advisor, distributor, broker and open the account online yourself.

• Transactions are done digitally: Often we hate to do the paper work for transactions. We also hate depending on our advisor /distributor to bring in the papers and submit them to the operational offices. Good news is that transactions in most financial products, especially mutual funds, can be today done completely online, any time any where.

• Goal planning tools readily available: If you think you need too much time to plan for your finances and these things bore you, well you are mistaken. There are many user friendly tools available today which can help you plan for your financial goals. This can be an option for you if you do not wish to talk to your advisor. Explore these tools which hardly take few minutes and you will know how much SIP or lump sum you need to save to fulfil your financial goals in life.

• Ask your advisor: Some may find the investment topic boring. Finding and approaching a good advisor can make a huge difference in such a situation. However we do not recommend you start online investments all by yourself unless you have a good amount of experience and knowledge to handle things.

These are just three of the most common excuses for not saving. There could be many more and you may even have a hundred excuses, however, there is only one reason to save – financial well-being. If you have the foresight and the common sense but lack bank balance to retire, savings is the way forward, without excuse. You would do well to remember a famous quote from Florence Nightingale -“I attribute my success to this – I never gave or took an excuse.” Happy saving and investing.

The ultimate goal of every investor is collecting a big corpus to secure a peaceful Retirement. So, you invest throughout your life and once your retirement approaches, you have your retirement corpus in your hand. Now what do you do, is it the end of investing? Shall you keep the retirement corpus in your bank account and keep nibbling at the big piece of cheese inch by inch? No, you can't do that, you can't let your life long perseverance die in your saving account. You need to have a post retirement investment plan to deliver justice to your money. Also, you may live long, so the next 3-4 decades are at the mercy of your retirement corpus, you don't want to run out of money in the last 10 years, so your nest egg must be utilized in a way that it lasts you until your D Day.

There'll be no new addition to the corpus, hence you must spend and invest wisely. So what should be your approach to investing after you retire?

There are various approaches that you can follow, depending upon your risk appetite. The Risk Appetite is dependent upon a number of factors like:

- Passive income source if any, like pension, rental income, interest income, and the amount of income;

- Whether you live in your own or rented house;

- Other assets that you may own like property, gold, stocks, etc,;

- and your attitude towards Risk.

Your Portfolio Allocation between Equity and Debt will largely depend upon your Risk Appetite, the sum of the above factors. Although we suggest retired investors to concentrate on limiting risk, yet if you have a stable financial background and a high risk appetite, then you can expose a major chunk of your retirement corpus to market linked products and vice versa.

There may be various approaches to Portfolio Management after retirement, which are different from the way you have been managing your portfolio during the working years. Some investors prefer securing their basic monthly expenses first by investing a portion in products which may give them a monthly income at least equal to their expenses and dedicating the rest to products with a high growth potential. While there are some investors who break their Portfolio into parts, the early, middle and last stages of retirement and invest accordingly. And there may be some who invest largely in Equity initially and as they age, gradually increase the Debt component by selling of Equity. And likewise there are many approaches, depending upon individual needs and preferences.

We suggest you to sit with your advisor and figure out your Portfolio Allocation and Investing Approach, which is in line with your financial position and Risk Appetite. Devise a financial plan and review it from time to time like you have always been doing.

Whichever approach you choose, you must be mindful of certain key points, which are as follows:

> In absence of a regular source of passive income, do not expose your money to excessive risk. A large chunk of the Portfolio should be invested in products where money can be withdrawn easily, without incurring any loss to the Principal.

> If you have any outstanding loans, then before investing, secure your mental peace by paying off your debt.

> Increase your emergency fund, an emergency can lead to a serious financial crunch since now there is no hope of a monthly pay cheque coming in to rescue you. Plus medical emergencies are also likely to rise.

> Do not limit yourself to traditional investing products, explore newer options like bonds, debt mutual funds, company deposits, etc., even if your risk profile demands you to limit yourself within Debt. The modern products are capable of delivering better returns, better flexibility, liquidity and investing convenience.

> Don't invest in products where the volatility is more than you can tolerate.

The bottomline is, Retirement isn't the end of investing, Investing is important, even though if you have a very large corpus or limited expenses, it is likely to be exhausted if not invested. Your Retirement is the beginning of a new life, now is the time to do things that you've always wanted to do. It's the time to pursue your passions, and you can live your entire retirement life to the fullest by planning for your future and investing right.

Young adults are perhaps the richest among all of us. They have something more than all of us - "time" at an age when the possibilities are unlimited. In case you are an young adult in 20s or 30s or a parent / guardian with children approaching or in their 20s, this article is for you. The article tells us few things which perhaps we were never told when we were young. We bring to you six valuable tips that can literally make a huge impact in lives of young adults going forward.

Learn about Personal Finance & Investing:
Knowledge about personal finance topics and investing at an early age is a great asset. Young adults must know about different asset classes, investment products, insurance, loans & credit, time value of money, inflation, savings, taxation, financial planning, etc. Such knowledge, especially during early years of career can really help someone take great decisions for future. If you are a guardian, be sure to involve the young adults in your own investment decisions. There are many ways in which young adults can gain financial knowledge. Some of the ways are...

• read books, finance magazines and watch TV shows on investments
• interact with financial advisors, accountants, experienced family members
• attend investment seminars/ camps by regulators, participants in financial services industry
• enroll for any certification from the many offered by NSE/ BSE on the subject matter

Control your spendings
Young adults are perhaps the most valued consumers hunted by every big brand ranging from cars to shoes to laptops to even holiday packages. With the newly gained earning power and lack of big responsibilities, it is natural that spendings on entertainment, gadgets, accessories, hanging out / parties, etc. form a big chunk of the spendings. Surely it is a time to enjoy life but young adults are advised to control their urge to spurge and not make impulsive decisions. It would be great if one can budget such spendings and avoid taking big decisions like buying of motorbikes, cars, laptops, etc. without adequate thinking and research.

Start investing immediately:
We have often spoken on this topic. The benefit of saving early can never be under estimated. Even if the savings is small, due to the power of compounding, the wealth created by you can be enormous, as seen from the following matrix.

In above e.g., Mr. Lazy would have to invest thrice the amount or Rs.3,000 monthly saved by Mr. Smart if he wants to match the wealth created by him at age 35.

Get PAN & start filing tax returns:
If you have started earning, it is best to start preparing & filing income tax returns (ITR) except when you are exempted to do so. There is a perception that if the taxes are paid, there is no need to file ITR. This is a misconception and it is essential to know that it is our constitutional obligation to file ITR when you are required to do so. Further still many believe that their incomes are too small to attract the attention of IT authorities and get tax scrutiny and hence may indulge in not filing returns or understating income. You may note that IT authorities uses a system whereby cases are picked up randomly on certain criteria. You may never like to be the one to get short-listed and invite unnecessary hassles. Remember that you are permitted to save taxes but not evade taxes.

Filling of ITR has many advantages as they are considered standard income proof globally and they help you while applying for loans, visa applications for jobs abroad, requesting tax refunds, etc. The PAN issued by IT authority is a prerequisite for filing ITR and is also mandatory for all financial transactions. So it makes sense to get yourself one even if you don't have much income to talk of.

Get health & life cover
Getting adequate protection in young age, where people tend to be more adventurous, is highly advised, even if there aren't any dependents on you. Buying health or life cover at a younger age is also considerably cheaper than buying the same after few years. Such protection can really help one in case there is any unforeseen emergency and financial burden on parents will be avoided.

Start thinking about home
The average age of home & car buyers has decreased dramatically in the last 20 years. Powered by easy availability of loans, fat pay packages & growing aspirations, the first time home buyer today is often around the age of 30. The first time car buyers are even younger. It would thus be best advised that young adults keep these goals in mind and start saving as much as possible for home & car goals, if any, from now onwards. It would really benefit you a lot when the time comes for purchase in near future. Often young adults delay saving for the goal and end up paying lesser down-payments and taking higher amount of loans which should be avoided. Lastly, even if you have a home of your own, it is advisable to think of buying a home as an investment for future and also enjoy tax benefits on same.

Conclusion:
Having time on your side is a great advantage and never to be missed. Few young adults may choose to ignore & not act on 6 tips shared above at their own peril. Experience has shown that wise decisions, actions and discipline in these formative years go a long way in securing a better financial future down the line. Simple actions taken today can help you avoid taking tough decisions at times when you have family to support and lot of responsibilities on your hands. So go ahead and make the best that this time has be offer, smartly.