Last week I was invited to speak at a meeting consisting of working bankers. Now all banks sell Mutual Funds & insurance so they have basic training of products. But after talking to them for around 45 minutes, I could guess they were not interested. For them, Good Advice – means product specific talk. They said they want “easy to make rich”
I was sad to see that bankers who advise mutual funds and insurance are just products sellers. They sold and invested with our goals and risk appetite. Means for them “Return Boley to Luck”. When I told them that with the good advice they can change luck to the surety, the majority passed the option.
For them, Good Advisory means guessing the best returns scheme of the future. They had closed the gates of wisdom by shutting the door to Good Advice.
Also, this post has photos of 5 doors/gates of India of historical importance. A picture treat. Also, see a video of simple patient driven investing made a person rich by 130 Cr!!!
Simplicity is usually compromised when people stop following good advice. They get complex and feel that taking a confused path is what their destiny is.
I have earlier written a lot about behavioral finance post investments. But what if there is a problem in the start. How will a car move if 5 gears are not working? Irony the driver is not realizing he needs to shift gears.
It’s never bad to form or have an opinion. But believing in a wrong fact and sticking to it – is a life long blunder. That is why you need to open your doors to good advice.
When it comes to investments there are 5 doors that an investor closes on himself.
These doors are not mistakes. These are investors thought process. They do what is easy for them. They shut the good advice to be comfortable and keep doing and repeating the mistake.
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5 Doors You Should NOT Shut on Good Advice
Door No 1: The investor feels they know all. They know better, even though they have zero experience
Walk into any office or franchise of a stock broker on a hot afternoon. You will find many so called “stock pickers” chilling themselves with a business newspaper waving to beat the heat. That newspaper is a big advice for anyone interested in markets but it is a better “fan” I guess.
Now, these retail investor flock 9 15 am to 3 30 trying to make money by just concentrating on price. You ask them about the stock they will shoot you with “I have been trading in this XXX stock for last 7 years. I know inside out”.
The worst part is these are just handful but thousands are login through internet & phones.
See this I a problem, you live so thick with something that you think you know it all. But you only know “price”, not the “value”.
Door No 2: Investor thinks big jargons & complex-sounding investments are exotic. So they neglect basic things.
I get many queries on PMS from investors who are yet to start investments. Many investors do Future & Option when they have not bought a single share in cash market after studying it.
They like when a tie-wearing person speaks so wisely about the market situation and dupe into buying some international fund.
Because we do not give regards to the person who explains in pure easy terms with no gibberish long words. Someone who does not promises rose bed is considered average. So when a good advisor explains you to make portfolio after planning your goals and identifying risk we do not trust him. We want products right away.
Door No 3: Many investors feel they have ‘lost out’. They have missed the best phases.
Investments are always difficult in any phases of the markets. You invest against risk hence returns are your premiums. So there has never an easy time to invest. Markets have risen from base to these highs – not in a day not in a year.
The problem here is an investor is too concentrated on markets rather than his portfolio. You can never control markets. But you can control your investment behavior.
If you are planned and equipped with what when & where to invest you are never late. The feeling of lost out is for people who despite knowing that they can take help and plan still make excuses.
You are left out because you don’t take the advice to start in a planned way. You are stuck because you are afraid.
Door No 4: Investors do not like hearing negative things about what they have invested in
Once you are invested you don’t want to take the advice that you have made a mistake. You ignore it not because of love but because you don’t want to look wrong.
That’s ego and not wisdom. Many investors still want to continue their endowment plans because they took it from agents during last minutes of tax dates. They don’t want to take a notional loss for future gains.
I meet a lot of investors and tell them not to invest in NFOs or IPOs. But they still do not adhere since they have been doing this in past. They have never made money this way but still, they do it.
Very few clients are ready to go back and accept, take loss & exit bad investments. Because it takes mental guts to see yourself wrong.
Door No 5: Investors are confused or have trust issues
It may be true that you have been a victim of miss-selling in the past. But restart is what you have to do. You cannot accept the status quo.
Many things prevail in an environment that does not ring a bell. May be you need experts to relate those ringing opportunities. But really you have to trust.
But you have to let us or a trusted advisor in.
The road to financial success is simple but many people distrust simple things. They cannot believe that simple patience can make them or their family rich & prosperous.
See in this video; Grandfather of the caller invested in 20000 shares of a good asset. He waited and the guy’s grandson is rich by RS 130 Cr. (Listen carefully the last 10 Seconds)
A simple example of identifying & investing in good asset and waiting patiently for the tree to bear fruits.
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