Real estate and equities can prove to be the key to beating pesky inflation as long as you're willing to wait it out. Not sticking steadfastly to standard asset allocation is what Mr Aneesh Srivastava, CIO, IDBI Federal Life Insurance advises. With over 15 years of experience, he has headed an India-dedicated European fund as well as Bajaj Allianz Life Insurance's equity investments. Edited excerpts :

What does money mean to you?

At the start of my career, money was more of a necessity and spent towards basic needs. At present, the role of surplus money is to create a corpus to provide for future family expenses and for my retirement needs.

How do you plan investments to beat inflation?

I believe in active management of my long-term investments. My portfolio includes real estate, with a very long term objective. Then, I rebalance my debt, equity and commodity investments at least twice a year, considering my risk appetite and the changing market which is the norm now. I always keep an eye out on new options available. However, my investments in real estate have helped in beating inflation the most.

Does gold feature prominently in your portfolio?

Gold is very small part of my portfolio; I'm not a big gold investor. It just helps to diversify my portfolio.

What is your key investment learning experience?

Returns of volatile assets like equities are uncertain in short run but such investments give superior returns over longer term. They're a very good inflation hedge. If you select companies with strong business models and promoters, growth of money is much faster. Also, there is a desired asset allocation that's determined for individuals depending on their age and needs. This standard, however, is meant for standard market conditions. If one of your assets in your portfolio is equity and equity markets correct substantially, then you can move away from your stipulated asset allocation to put more money in equities. In the same vein, if equities have run up substantially it is necessary to pull money out of equity and channel it into debt.

Which investment has made the most money for you?

The safest investment which has given me maximum return is real estate.

How does one go about structuring investment portfolios?

The first step is to assess your needs and set financial goals. Next, evaluate ability to sustain the volatility of investment portfolios. Last comes the selection of asset classes and deployment of funds. I would like to stress on one point - even if you have a high-risk appetite, you should not deploy that proportion of fund which is needed in the near term in volatile and risky assets.

What are the insurance must-haves for a young investor?

You and your family need protection from two things. One, mortality of the bread-earner and two, health care expenses. Insurance helps in providing immunity against these two.

What is your message for young investors starting their career?

Don't put off savings for tomorrow. Tomorrow never comes! Deploy savings into investments according to needs. For instance, when you're young, you would want to buy a house. Start saving to meet the down-payment. Long term and systematic investments help build a large savings pool..

Any books you would suggest young investors read?

‘The Investment Game' by Prasanna Chandra. First time investors must read that.

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