Real estate and equity are the two best asset classes to beat inflation in developing economies such as India, says Mr Saibal Ghosh, Chief Investment Officer, AEGON Religare Life Insurance . Mr Ghosh has over 15 years experience in capital markets. Excerpts from the interview.

What are your top financial goals?

The top financial goals for me would be meeting liquidity in the short-run while maintaining solvency in the long-run.

What does money mean to you?

The meaning of money is same for everyone and that is the exact reason why “money” is an acceptable mean of valuations to all of us.

How do you plan investments to beat inflation?

My personal belief is that in a growing and young economy like India, the best way to beat inflation is by adding equity and real estate to your investment portfolio, provided your risk-taking capability permits such investments.

Does gold feature prominently in your portfolio?

No gold does not feature prominently as I am not sure I understand the market dynamics of gold properly.

What is your key learning experience in investment?

My investment experience has taught me that you don't get anything for free in this world.

Which investment has made you the most money?

According to me real estate has been a good investment. My first investment in real estate is the flat I live in today. Seeing the way the real estate prices have escalated since I bought this flat about 7-8 years ago tells me that had I not bought this flat at that point in time I would still be living in a rented apartment. I firmly believe that real estate, despite cyclical down trends, will remain a good investment bet over a 7-10 year horizon.

What is your message on savings and investments for investors starting their career?

For investors starting their career, I have one message - the universal truth is that risk and returns are positively correlated. And investments and savings are just other such functions which are not exceptions to this universal law.

Therefore, always know your risk appetite before you choose to invest. The return will only be consequential to your risk profile selection. Building a secure financial future is like building a house. You need strong foundations in order to create a long-lasting structure.

What are the books you read on investment?

None. Investments are based either on solid current research or on rationale dynamic responses to a constantly changing environment. There are multiplicities of factors that can impact investment decisions and these cannot be captured in books. In markets what worked yesterday may not work today and past performance is no guarantee of future returns. One has to absorb, adopt and react on a daily basis. Just like no book can make a great sportsman similarly no book can make a great investor.

What is the one big investment mistake you've made?

It would have to be entering the equity market at relatively late age.

As a young investor what was your experience on investment and at what age you made your first investment?

There are many kinds of investors and I am a defensive investor. In doing so I tend to cap returns during sharp up trends but I also manage to control the downside during down trends. This is reflected in my ‘born conservative' attitude as a result of which my first investment was in a Public Provident Fund (PPF) account, which I am still religiously continuing.

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