Study the market, but don’t put off investing

Real-estate investments can be made with a four- to eight-year horizon, according to Vidya Shah, CEO, EdelGive Foundation. She also believes women make good investors.

Can you share four successful investments that you made?

Though I was not an employee of Edelweiss when it started, I invested in it. Second, I bought shares in ICICI as an employee when it went public. I recommend buying shares or options of the company you work for. I bought shares in Infosys during its IPO that turned out to be a great long-term investment. I also consider my house, which I bought 18 years after I started my career, as a long-term investment.

What are your three investment rules?

The three rules I follow comes from a long-term view. First, if your holding period is long, don’t worry about the current price. In the long term, you will get good returns. Second, don’t time your investments to the market. Third, always go for quality over price. So, if the company’s management and growth prospects are good, price variations do not matter.

What are the two asset classes you are bullish on?

I am bullish on equities because you can be part of some of the best companies in India and even the world. Equities are great investment vehicles for the medium to long term. I am also bullish on bonds given that currently interest rates are high and should ease. Bonds make good short- to medium-term bets.

Is there one financial decision you regret?

There are, in fact, two. I wish I had bought more shares in Edelweiss, and purchased my house earlier.

What is your view on real estate investments?

I think, you should buy your own house early. It must be understood that the amount invested in property is illiquid.

Also, over the long term, say 15 to 20 years, real estate gives only 10-15 per cent return, while equities offer 18-20 per cent. One can invest in real estate for a medium term of say four-eight years.

Have you been in a tight spot?

I can’t say I was actually in a tight spot. But when Peregrine Capital, where I was working, was closed as a result of problems in Hong Kong, I lost my job. This was an interesting study in human nature, dealing with being out of a job suddenly.

Any advice you want to share?

Start saving early. I began investing in equities when I was 18. Women usually shy away from investing in the markets; they believe it is not their cup of tea. But I believe women can make great long-term investors. We are more emotionally balanced, partnership-oriented and can take a long-term view of things. The mantra should be: study first, but don’t put off investing.

We are a nation of committed savers, but not educated investors. Take risks as long as they are calculated, you can afford to take them and are worth taking.

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