Makings of a peaceful retirement

Mr. Surendra Patkar, in his late 60's, is not like any other retiree you often meet. Ask him about his areas of interest and he has an interesting list to share. Born and brought up in a middle-class family in Mumbai, Patkar is a regular at playing chess and likes trekking to the Western Ghats and Himalayas. He has a collection of 20,000+ classical, semi-classical, old Hindi/Marathi/Bengali songs and attends three international film festivals every year to watch good films. A post-graduate in economics, Patkar worked with a public-sector bank before retiring in 2011. A Value Research reader since 15 years, he considers it to be an honest mutual fund guide. He invests in multicap (now flexi cap) and ELSS funds based on Value Research ratings. But unlike many other Value Research readers, Surendra prefers to invest in lump-sum.

Instead of a 'to-do list', Mumbai's Surendra has a 'never-do-this list' for his investment ideas. It includes never indulging in day trading, never investing in unknown stocks, never leveraging, never considering property and gold as reliable investment avenues and always ignoring verbal tips. And the disciplined investor in him has been diligently following it.

Starting his investment journey out of curiosity, Patkar recalls, "My workplace was near the present BSE Tower. I was curious about the activity that took place there and started gathering information." He started saving from the young age of 25, with his first investments being in IPOs and UTI schemes. "During those times in 1975, secondary-market investments were beyond the reach of small investors and brokers did not bother about small trades. I used to invest in every new scheme launched by UTI as it was the only AMC that existed at that time. So, IPOs and UTI were the only options available to invest in equity," he adds.

UTI Mastershare was his first multibagger investment. He recalls how the scheme rose 1400% due to some rumours and he liquidated his investments to pocket a bonanza. UGS 2000 & UGS 5000 were the other UTI schemes that proved rewarding for him. Explaining his strategy, he says, "Both these schemes were listed on the market as well as repurchased by UTI. The market prices were at a 25-30 per cent discount to their NAVs. I used to purchase in the market, get them transferred to my name and then surrendered them to UTI to make a 15-20 per cent profit." But all good things come to an end and so did his strategy after profiting him for three years.

After his stint with the UTI schemes, Patkar also started investing in stocks. He mentions, "Soon access to secondary market was eased and I started with stock investments based on weekend investment supplements of Economic Times and Business Line." With the holding period of two to three months, his investments generated returns of 15-20 per cent. In 1992, his investments doubled ahead of the Harshad Mehta Scam. But he was worried about the market euphoria and liquidated all his stock and mutual fund investments. Call it his fear or intelligence, he timed his exit to perfection as the markets crashed just two weeks later.

His love for stocks persisted and he fondly remembers his investments in HCL Technologies that yielded handsome returns between 1996 and 2000. But the period from year 2003 to 2007 turned out to be the real money spinner for Patkar. At that time, he happened to attend an investors' meet arranged by a local broker where they spoke at length about how the bull run that started in 2003 would sustain. He got convinced to defer his plan to exit the markets and that proved extremely rewarding on the hindsight.

Soon afterwards, he decided to liquidate all his direct stock investments to free himself from the need to monitor the markets continually. But he continued with his mutual fund investments.

Patkar still feels uneasy about sharp market upswings but like everything else, he has a strategy for this. Calling it his way of asset allocation, he adds, "Normally I maintain a 70-30 equity-debt ratio. But I stop investing in equity when the Sensex P/E ratio crosses 24 and start liquidating in stages when it crosses 26. I have been following this since my portfolio lost 20% during the 2008 crash."

Patkar decided to start investing directly in stocks again when Value Research launched its Stock Advisor service in 2017. He initially subscribed to it just out of curiosity and to only read the reports of recommended stocks. But soon, he was able to build enough conviction on the buy-and-hold strategy advocated by Value Research Stock Advisor and he started in stocks again after a hiatus of 11 years, though only in the recommended ones.

Patkar now intends to hold Value Research recommended stocks till advised otherwise.
His present mutual fund holdings include Aditya Birla Sun Life Equity Fund (now Aditya Birla Sun Life Flexi Cap Fund), Axis Long Term Equity Fund, Mirae Asset India Equity Fund (now Mirae Asset Large Cap Fund) among others.

Reading through this narrative, you'd realize that he actually adopted some methods one wouldn't recommend, such as investing in lump-sum and timing the market. So, was his investing success out of sheer luck? The biggest contributor to his successful investing journey has been his ability to steer clear of the greed and to not get carried away whenever the markets entered euphoric levels. That ensured that he earned well enough to afford good education for his daughters and accumulate sufficient wealth for his retirement. Besides, his discipline with his equity-debt allocation and re-balancing linked to market levels have ensured that he doesn't squander the wealth he built over the years.

With his retirement corpus still intact, his pensions take care of all the household expenses. He goes on family tours two to three times every year and also donates Rs. 1 lakh each to two NGOs - one working towards education for poor children and the other for water conservation.

He credits his exposure to equity for his peaceful and contended retired life.

This story was first published in January 2019.

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This article was originally published on September 20, 2021.