“Risk is what’s left over after you think you’ve thought of everything. We are really good at managing risk by looking backward and preparing ourselves to handle a situation we’ve already seen… only better this time. But we’re not very good at preparing for something we can’t even imagine.” Carl Richards-Behaviour Gap.
Risk is a boring subject. When things are doing well and everything is happening much more than expectations, we become complacent.
“Those who do not learn from history are doomed to repeat it” so said the legendary Winston Churchill.
We seriously feel your personal finances are at RISK if:
1.Minimum 25% of your personal financial portfolio and/or Minimum 12 months of your mandatory expenses are not in safe liquid structures like banking Products or safe debt Mutual Funds.
- More than 75% of your personal financial portfolio are in equity related investments like equity mutual funds or direct stocks. Ideally 50% allocation to equity investments works best.
- More than 25% of your personal financial portfolio are in small and mid-cap stocks/PMS/mutual funds.
- You feel investments linked to equity markets are best suitable for regular income.
- You have started believing and assuming equity market linked products only give linear high returns year on year much more than safe products like bank deposits.
- You feel following the FINFLUENCERS and social media experts you too have become an expert investor. And moreover investing/trading in equity markets/products gives you good part time income.
7.You have become so risk averse and have started thinking inflation does not affect you and hence your entire financial portfolio is in Fixed Deposits.
- More than 50% of your personal financial portfolio is in Real estate excluding your Self Occupied Property.
- More than 75% of your monthly income goes to service loans.
10.You feel that your financial agent/broker/bankers are giving you free advice and their incentives are aligned with yours.
- You and your family are not having a minimum of Rs. 25 Lakhs Medical Cover including that from your employer. Ideally Rs 50 lakhs plus is best.
- You believe that your family’s lifestyle will be compromised if you do not get up in the morning or get disabled/critically ill.
- You have not shared your updated personal financial details with someone close in your family.
- Your Nominee details are not updated in all your investments.
- You have not drafted a WILL incorporating all your assets.
You cannot predict the unexpected but can definitely plan well in advance so that your and family’s lifestyle is not compromised. And it is best to do it when the going is good. If the RISKs are managed well, returns will take care of itself.
As part of our advisory process, our clients would have experienced our unbiased approach to managing Wealth. We have always discussed RISK more than RETURNS, where STRATEGIES come first and not PRODUCTS, where YOU are important rather than financial markets, where the only target for us is to give SOLUTIONS to your financial well-being rather than selling unwanted products.
Do connect with us for any feedback.
Happy Investing,
Naveen Julian Rego
MD and Principal officer
Date: 30-08-2024
Disclaimers:
- Investment in the securities market is subject to market risks. Read all the related documents carefully before investing.
- Registration granted by SEBI, membership of BASL and certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors.