Investment advice: Where do they go?

Investor groups guide me

Sushila Hariharan, a corporate trainer based in Pune, invests in mutual funds. She says that she relies on online financial portals such as ValueResearch for fund related information. “I look for data and research online and discuss with investors in my group.” Her investor group does online chat sessions to discuss ideas and rationalise decisions. “Sometimes you get excited about some investment product or want to re-allocate your assets. It helps to discuss these with a group of experienced investors,” she says.

For example, in 2000 she invested in IT thematic funds. “I entered at a high NAV and exited at a low point and burnt my fingers,” she says. Discussing ideas would have saved her, she feels. In 2008, she found a window of opportunity to invest in FMPs. “I normally do not churn my portfolio but this was a good short-term bet. I took it and profited,” she says.

Sushila says that online message boards and advice over the dinner table can be poor sources. “You need to research these inputs and probe the motivation behind the advice,” she cautions. “When you have diabetes or high blood pressure, you don’t just Google for remedy. You consult a doctor. A similar approach is needed for better financial health,” she says

I rely on industry bodies, newspapers

Abhijeet Pai is a seasoned investor based in Hyderabad who invests when he finds deep value in the long term. He runs a family business in the infrastructure segment and is also a promoter of e-commerce solutions providers. His family also invests in the stock market and their current portfolio holdings are tilted towards pharma and infrastructure companies, where they found some value picks.

Rather than stock-specific information, he is keen to know broader trends. “I want to know where the Government is looking and where avenues exist for adding value,” he says.

One source to get information on macro trends and regulatory changes is industry bodies such as CII, Nasscom and other industry-specific associations.

He is a regular reader of business newspapers. “I cannot do without my daily dose of BusinessLine and Economic Times. I get updates on start-ups and the market sentiment from the mainstream print media,” he says.

He reads the papers on his mobile on the go, so that he keeps up. Pai says he also browses for information on people who are successful investors so as to learn from their experiences.

I read business dailies

PR Vasudevan of Chennai who took voluntary retirement believes in gathering data from many sources to make informed decisions. “I engage in discussions with friends who track the markets. But I don’t just blindly invest in the stocks or mutual fund schemes they recommend,” he says. He enjoys tracking the market regularly. “I read business papers everyday to keep myself abreast of corporate news. I use the internet extensively to read about the companies that I wish to invest in,” he elaborates.

I listen to close friends

Bengaluru-based Mahalingam V, on the other hand, trusts the advice of close friends who he says are savvy investors. Being part of the senior management team of a leading telecom company, he has a very busy schedule. “My job involves regular travel and that leaves me with little time to do my own research. But I have friends who are very active in the market. They give me good investment ideas,” explains Mahalingam.

One source he does not, however, trust for advice is TV channels. He says taking advice from unknown people can be risky as we are not sure of their motive. But why not seek advice from paid financial professionals who may be able to better manage his portfolio? He says that he is happy with the investment product ideas and stock picks from his close friends and never felt the need to seek out paid advice.

“I have been investing in the market for over nine years guided by my friends. It has worked out fairly well so far,” he says with a smile.

My financial advisor helps me select mutual funds

Chennai-based A D Nityaanand, who retired from Food Corporation of India, looks to his financial advisor for his mutual fund investments. “I used to invest based on word of mouth recommendations. But in the last eight years or so, I have a financial advisor,” he says. “Everyone has a different point of view. To do the job right, you need a lot of exposure and require a detailed study,” he explains, when asked why he looks for professional advice.

He feels that popular ideas may not be the best. “In 2009-10, my advisor at that time sold me a few new fund offers (NFOs) saying the NAV is only ₹10. These investments did not give me sustained performance. I learnt that you must not go with what is trumpeted widely,” he advises.

Now, even with an advisor he trusts, he keeps himself updated with data. “I look at the fund performance information in the statements they send. I also read articles in newspapers on fund recommendations. I subscribe to Mutual Fund Insight, a monthly magazine that provides rankings and performance data on funds,” he says. This helps him discuss things with his advisor before taking decisions.

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