The attractiveness of different investments keeps changing: Arathi Krishnan

Our Bureau | | Updated on: Sep 08, 2019
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“Keep an open mind about changing investment options over time. The advice you get today may not be valid three years down the line,” was The Hindu BusinessLine ’s Editorial Consultant Aarati Krishnan’s advice to the investors.

Sharing “five simple tips to wealth creation” at the SURGE SME Conclave, organised by The Hindu BusinessLine, in association with Aditya Birla Sun Life Mutual Fund in Coimbatore on Friday, Krishnan told participants that the investment choices in India were many and best options keep changing.

“Ten years ago, I would have said investing in property is a good idea. Today, I will vouch for equity. The attractiveness for different investments keeps changing. Take the advice of a qualified advisor,” Krishnan reiterated. Cautioning participants against shifting from an asset allocation plan, she cited how the temptation to make quick money had driven people to invest in assets that performed well in the preceding one to three years, only to realise later that it was a bad choice.

“Now, people are looking at Gold ETF as a good investment option as it has given 27 per cent return in the last one year. But studies show that this trend could be short-lived. Gold witnessed a great run between 2007 and 2012, but the next five years were very different.”

“The eagerness to get rich quickly has led many into a trap. Investing in unregulated instruments, in derivatives that promise assured returns, and asset or products with regulatory issues, can be risky,” Krishnan cautioned, while advising participants to invest in equity in a bear market.

“Here, too, do not opt for random stocks. Further, while investing in equities in a bear market such as the present, one would need to review the investment and rectify the mistake to benefit when there is a bull run.”

Thus stating, she underscored the need for a periodic review of investments so as to exit from bad ones, not be obsessed with investing in tax planning products to the exclusion of other products and the need for compounding of investments — not just equity but debt as well.

Published on September 08, 2019

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