What, how, where and why

Whenever any investor is asked questions about their investing, they tend to focus entirely on what they have invested in. That sounds like quite the natural thing to do, and I personally do it all the time. Isn't that the question, you might ask? If I'm asked about my investing; naturally, I will answer with what I have invested in. Actually, when I carefully examine my personal investments, I realise that there is a far more useful and interesting answer to the question: why I did what I did, and how I went about doing it. If you really want to know about my investing process, then just a list of what I am invested in doesn't cut it. The journey I undertook, the route I chose and why I chose it are just as important as the destination I reached. The reason it's important is that how you do something is actually more important than what you do. Let's say that I told you that I hold Rs 1 crore worth of X equity mutual fund and that this is about 20 per cent of my total financial assets. That's fine, you say, and set off to emulate that. You too go off, liquidate some investments and put 20 per cent of your financial asset base into equity fund X. You and I are now at par as far as this fund is concerned, r

This article was originally published on December 04, 2021, and last updated on February 03, 2023.