Excerpts from the interview:

When did you start investing?

I started investing when I was 22 years old.

What asset did you acquire first — home, stocks or was it other investments?

I acquired mutual funds as my first asset.

What asset allocation did you start with, and how has it changed over the years?

My asset allocation was 80 per cent stocks, 15 per cent bonds and 5 per cent cash. It has changed to roughly 50 per cent stocks/mutual funds, 30 per cent, real-estate, 15 per cent bonds and 5 per cent cash.

Which was the first stock you picked, at what age and did you make money on it — any learning from that experience?

I invested primarily in mutual funds or index funds tied to the S&P, Russell, etc, and very rarely in individual stocks. The returns have exceeded S&P 500’s annual returns since inception of my investments.

What is your return expectation?

My return expectation exceeds 20 per cent to 30 per cent on average for the portfolio.

Some experts believe that young investors can afford 70-80 per cent exposure to equity. Do you share that view?

Young investors can afford a significantly higher exposure to equity. However, they must review their asset allocation regularly (at least once annually) and adjust the mix according to their risk tolerance and returns.

Also, they must only set aside the money they can afford to lose without affecting their immediate needs. An investor must generally put aside 12 months’ worth of living expenses in short-term liquid assets as his/her safety net before investing.

Any books on investing that have impressed you?

Many.. Try ‘Think and Grow Rich’; ‘Rich Dad, Poor Dad’, among others.

Your advice on three things that youngsters should/should not do when they start off.

Start by figuring out what will make you ‘Happy’. (Most things in life that bring people happiness have nothing to do with excessive money.) What is the minimum money you will need to ensure a lifestyle of your choice and desire, where money will not be a cause of unhappiness once you have that money.

Once you arrive at that amount, you can then figure out how to make that money through investment choices and through your career/business. Try to be content with it once you achieve it. I’m not saying ‘don’t have goals’ — I’m saying ‘Be ambitious and goal-driven but not solely money-driven.’

Start saving early, invest regularly, have an annual plan and stick to it while reviewing investments and adjusting based on change in allocation/risk profile, join an investment club or talk to reliable mentors who are successful investors. Most importantly, the singular goal must not be to make money simply for the sake of making money.

AARATI KRISHNAN

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