The same old story
We keep giving the same conceptual advice to investors in different kinds of markets. Dhirendra Kumar explains why we keep repeating ourselves
By Dhirendra Kumar | Jan 1, 2019
A lot of what I write is mere repetition. In fact, I have written columns and editorials so many times that have said the same things. The words and the emphasis may be different, but fundamentally and conceptually, everything is the same.
And that's a good thing. I'm quite happy that we have said things that we have said earlier and so should you be. To appreciate why that's the reason, think of what would happen if it was the opposite case. What if every time equity markets and equity-fund NAVs fell, Mutual Fund Insight said something completely different?
One time, we could say that you should sell all your fund holdings and move your money into fixed deposits because the times are risky. The second time, we could say that you should choose the fund which had fallen the most and move all your money into that because we expect a reversion to the mean. The third time, we could say that you should get into derivatives and buy options so that you could cover any chance of further adverse moves in equities. Another time we could ask you to immediately move all your holdings into gold because gold was a safe asset in bad times.
It would certainly be very exciting and entertaining for us to write all this and for many readers to read it. And it would actually be quite normal because this is exactly what many investment advisors and investment publications do. I mean I'm not making any of this up - these are actual investment strategies that are suggested by so many in such conditions and I'm sure you too have heard them.
However, I believe that the value of Value Research is that we say the same thing under the same circumstances - always and without fail. I would say that by now, between our various publications and whatever I say in print, radio and TV, Value Research has said practically everything that needs to be said about investment. Of course, the details need to change. Different funds do better or worse at different times, SEBI makes regulatory changes that need to be taken into account and other things evolve. But in all of investing, there are no new concepts or principles and haven't been for a long time.
So why do we keep repeating ourselves then? That's the funny thing - we all need a constant re-emphasising and strengthening of basic principles. There's so much counter-noise of harmful advice (based on nothing more than the commercial interests of providers) that simple, wise and time-tested principles can get drowned out.
In fact, when I'm asked by TV or print publishers to do specials on Diwali or New Year's, etc., for any occasion-specific opinions, I find it extremely difficult to say anything. If you ask my response to 'investing strategies for 2019' , the only honest response would be that they are the same for 2015, or 2019, or 2030!