It’s best to keep your bird in hand

Using tried-and-tested spreadsheet software is the best way to keep track of your investments, says Anutosh Bose, technology enthusiast and Chief Operating Officer, LIC Nomura Mutual Fund. More tips on investments and how to manage them.

What was your first investment? How did you decide on it?

When I was in fifth grade, my grandma helped me open my first bank account and made a bank deposit under her guardianship. It was a great feeling holding a passbook with my name written on it.

What are your best and worst investments? What are the lessons you have learnt?

Money-wise, my best investment till date is my apartment. And yes, there were a couple of impulsive decisions taken in the initial years of earnings that taught me a lot. First, don’t invest going by the advice of others. Your own research and reading is essential before investing.

Second, one should be ready to learn from the mistakes and cut losses. Third, once a decided level of return is achieved, book your profit. A bird in hand is better than two in the bush, as the popular saying goes.

But how often should investors check or churn their portfolios?

Keep in mind three time horizons — short term, medium term and long term, based on the goals. Long-term investment should be around seven to 10 years. Investors should monitor their portfolio at least once on a monthly basis and profit should be booked as soon as the intended target performance is achieved.

Similarly, non-performing investments also need corrective measures based on the risk appetite.

Approximately, how much should investors try to save from their earnings?

Much is talked and written about this. The sooner one wants to retire, the higher the allocation should be. Generally a structured 20 per cent saving over an average work life will help in accumulating a decent corpus. The key is diversification of investment and regular monitoring.

Should investors use the direct route to investing in mutual funds? How much value-add does a distributor offer?

Both direct and regular mutual fund schemes have their share of positives and negatives. A financially literate person is in a better position to decide. Professional advice is useful even to experts in the field.

Do you draw inspiration from any personalities or philosophies?

The investment legends and entrepreneurs do inspire me. They provide different perspectives on the subject.

Having said that, they cannot be replicated by everyone. We need to pick up prudently whatever suits our needs in achieving the set goals.

What are the finance apps you use most frequently?

Being a technology enthusiast, I have tried many software applications. But in my view, most of the needs of an investor can be met by using standard spreadsheet applications. The spread sheet can further be automated for updation of mutual fund scheme’s net asset values (NAVs) or stock prices by the click of a button. The latest information of the NAVs and stock prices are available on AMFI and stock exchange websites respectively on a daily basis.

Can you suggest some budgeting tools that people can use?

Many Web portals offer portfolio tracking services free of cost. Based on the investment cost details, the Web site provides point-in-time value of the portfolio along with individual investment positions.

From the earlier days of Microsoft Money and Quicken, now there are many personal finance software available. Quicken and AceMoney are the constant contenders for the top slot. But since these are paid applications, users should evaluate them according to their needs before making the actual purchase.

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