How Captain Shrivastava earned decent returns on his investments despite starting late with investing
Updated on: 05-Sep-2022 •Research Desk
A late start need not deter one from making a success of investing. That's the cardinal lesson from the story of Rajendra Shrivastava, 61, formerly a captain with the merchant navy. A resident of Pune, Captain Shrivastava frankly admits that he had no need to learn about personal finance until age 50, thanks to his career. Between 1979 and 1998, he was with the merchant navy and was sailing the high seas. Given that he enjoyed an NRI status, his income was in dollars and he was able to invest it in dollar-denominated FDs as well as savings accounts in India. Even if they paid only 6-7 per cent interest, the return was tax-free and the rupee would depreciate by a predictable 10 per cent or so every year against the dollar. This happy state of affairs continued for eight more years after Captain Shrivastava was done with his sea life and decided to take up a job with Mumbai's Port Trust, as he continued to enjoy benefits of an NRI status. But post 2004, the RBI began to adopt less liberal rules for forex accounts and the dollar began to sink against the rupee.
Tryst with mutual funds
As the returns from dollar deposits began to dwindle, he decided to take a more active hand in managing his finances. "I started investing actively from 2004 onwards and came across both Mutual Fund Insight magazine and the Value Research website. When I started, I had no idea about equities or mutual funds. I didn't even know what NAV was. But I was determined that if I didn't look after my money, nobody else will. I set about learning these concepts," he says.
Initially, he tried his hand at investing directly in stocks. "But if I made 10 per cent, I would also lose 10 per cent," so he decided to route his equity investments mainly through mutual funds. Today 80-90 per cent of his equity portfolio is parked in equity funds. He also ensures that his direct equity exposure is never more than Rs 5 lakh at a time, even if he gets really tempted by some stocks.
From a completely debt-oriented portfolio, Mr Shrivastava then moved his overall asset allocation to 50:50 between equity and debt. He retained his debt investments because he had already made plans to gift his children some assets when he turned 60 and retired. He says ICICI Pru Long Term Debt Fund has done very well for him over the years.
After his official retirement, he has taken up a teaching assignment at the Tolani Maritime Institute in Pune. Income from here, apart from pension, allows him to still invest as much as Rs 70,000 a month through SIPs.
Mr Shrivastava says that three investment tenets, learnt over the years, have helped him build a very healthy nest egg. "I keep my SIPs on and don't time the markets. This is one thing I have taught my children too. By now, my elder son is much better than me at this. Even when the markets fell in 2008 from 21,000 to 8,000, he kept investing through SIPs. Now (2016) that it is back to 28,000 he's still continuing," he says with a touch of pride.
Two, he learnt about the need to diversify not only across types of funds, but also across fund houses because too many eggs in one basket can hurt. "When I started off initially, HDFC Mutual Fund gave me such good returns that I took heavy bets on the house. I owned almost all the funds (then) managed by Prashant Jain - HDFC Equity (now HDFC Flexi Cap Fund), HDFC Top 200 (now HDFC Top 100 Fund), even HDFC MIP Long Term (now HDFC Hybrid Debt Fund), where the equity portion was managed by him. But the performance slowed in later years. I have realised that it is best to diversify across fund houses too." He has diversified into ICICI Pru Focused Bluechip (now ICICI Prudential Bluechip Fund) and ICICI Pru Value Discovery, which he says he's 'quite fond of'. He also owns IDFC Premier Equity (now IDFC Flexi Cap Fund).
The third lesson that has paid off for him is studiously avoiding the NFO craze. "I never go for an NFO. I have found that a fund's name may be new, but NFOs often duplicate the older portfolios that you own."
Finally, what he has really liked about Value Research is that it has made him self-reliant with his finances. "You don't attempt spoon-feeding. You put the menu and plates and forks on the table and let me choose what I eat!" he concludes.
This story first appeared in February 2016.
Do you have an interesting story about how your investment journey unfolded? Share with us on [email protected].