CA NeWs Beta*: Start early, invest wisely and retire young

Search This Site

Tuesday, September 20, 2011

Start early, invest wisely and retire young

Inflation being the biggest threat of all times, it becomes important
to know what the future will be like with escalating costs. If one's
present monthly expenses are Rs 15,000, then they may need Rs 84,066
in the next 20 years with expected 9 per cent inflation, said Mr
Balaji Rao, Promoter, Sapien Knowledge Ventures, here on Thursday.

Delivering the Business Line Club lecture on equities and derivatives
sponsored by Syndicate Bank for the students of MES Institute of
Management, he said that the students had just 20 years to earn, spend
and save. Hence they needed to start investing early in instruments
that help in overcoming inflation.

Instruments such as equity (stocks and mutual funds), metal (gold and
silver) and real estate are considered as some of the wealth-creating
assets. The returns are not entirely predictable; they are considered
high-risk investments. But they may give high returns, he said.

“However, if you invest wisely, chances are that you may reap huge
benefits. There are few important points to remember. Do not invest in
a single asset. Invest in various assets, thereby hedging market risk.
And, you also must not expect perfection in your portfolio of
investments as losses do happen. But take it supportively. Sell and
get out of consistently underperforming assets and invest for long in
those assets which are riskier by nature,” Mr Rao told the students.

He provided information on various investments options people seek and
said that stocks are a unique kind of investment as they allow
investors to take partial ownership in a company. Hence, the returns
are potentially bigger, he said.

“Various research reports are available, which assist the investors to
invest in good companies. Investors with adequate risk can do value
buying (buying undervalued assets) to attain aggressive returns, while
mutual funds are ideal for passive investing in equities. Asset
allocation is considered aggressive, when 50 per cent is allocated to
equity, 40 per cent to gold and only 10 per cent to debt funds; while
it is considered moderate, when 30 per cent is allocated to equity and
debt and 40 per cent to gold. So, the mantra for youngsters – start
early, invest wisely and retire young,” Mr Rao added.

SyndYuva and SyndVidya, the two products of Syndicate Bank for the
youth, were introduced to the students. Mr D. Rajaraman, Principal,
MES Institute of Management, was also present at the event.

(This article was published in the Business Line print edition dated
September 20, 2011)

No comments:

Post a Comment

Related Posts Plugin for WordPress, Blogger...
For mobile version of this site click here


News Archive

Recommended Post Slide Out For Blogger