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Grieving for Good Sense

We should realise that investment returns are not correlated with the amount of time you spend obsessing over them or by the number of people you ask for advice

Some time ago, an elderly relative of a family friend of mine passed away. The next day, while I was at the cremation, I had a really strange experience. While the pyre was burning, I noticed that a man who looked really stricken with grief at the passing of the old lady was continuously staring at me. A few minutes later, he left the group of people he was with (who were obviously close relatives of the departed soul) and came and stood next to me.

"I've seen you on the mutual fund programme on TV," he whispered. I nodded, not knowing whether I was expected to carry on a conversation. And then, having surreptitiously glanced around to make sure no one was listening, he whispered again, "Is the market going to go up?"

"I don't know," I said. It was an honest answer because I never do know what's going to happen to the markets (nor, do I think does anyone else but that's not the point). The man looked hurt and angry, perhaps because he felt that I should have done my bit to lighten his sorrow by predicting the future direction of the BSE Sensex. Once he realised that I was too heartless to oblige, he stalked off and kept glaring at me till I left.

Later, I couldn't help thinking about this incident and wonder at the vast range of attention levels that people pay to investing. I'm not talking about those who have a legitimate professional connection with the markets like investment managers, CFOs, family astrologers of stockbrokers and perhaps even editors of mutual fund magazines. I am talking instead of ordinary people who have a non-financial profession.

I've observed that there is a long scale along which people can be placed based on their interest in investing. There are those who never, ever think of savings or investments. This isn't particularly bad if all you can afford to save is what gets cut from your salary as provident fund, although even this category will need to build a little awareness--see our cover story for details.

Then there are those who think about investments once a year, normally around the 28th of March when they wake up to making some tax-savings investments. At the other extreme are people who obsess with investments all the time without any justification. This is the category that the person who harassed me at that funeral belonged to. This category seems tormented by the thought that if only they had some real information about the markets--some secret that others know and are not telling--then they too could earn crores without any effort.

I really like what I do as a profession but I must tell you that while the above incident is the only time I've been harassed by a mourner at a funeral, most people who are in professions similar to mine are frequently waylaid by these obsessive seekers of the markets' secrets.

I think there's a correct level of interest in investing. Perhaps this correct level should be calculated by looking at the proportion between your real income and the returns from your investments. I mean if your main professional income is fifty times the amount of your investments' returns then you surely should limit your investment research to perhaps reading this magazine for maybe one day in a month. At the very least, we should all realise that investment returns are not correlated with the amount of time you spend obsessing over them or by the number of people you ask for advice, specially at funerals.