Category Archives: Personal Finance

Navigating Tough Times in Stock Market

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Greetings from PenguWIN:

Most people dislike uncertainty and change. But resilience to these characteristics is what makes a successful investor in Stock Markets.

Reminiscing couple of Buffets Quotes

The most important quality for an investor is temperament, not intellect. You need a temperament that neither derives great pleasure from being with the crowd or against the crowd.

Successful investing takes time, discipline and patience. No matter how great the talent or effort, some things just take time: You can’t produce a baby in one month by getting nine women pregnant”

Yes, things are easier said than done. After seeing returns slowly move up and cross 10% and even close to 20% for investors in the past 5 years (depends on entry point), going down to less than 10% is difficult to digest.

So, what can we do?

  1. Don’t lose sleep by looking at returns on a continuous basis which is dependent on the market and fund manager. Even if we change the fund, there is every chance that the earlier fund manager will do a course correction as everyone makes mistakes, while the new fund might go into a bad phase.
  2. Markets are influenced by too many factors, some logical. Political changes, Foreign Portfolio Investor (FPI) flows, Finance and Commerce ministry policies, Budget and Taxation, GDP, Inflation, sectoral issues (Coal, NBFC) and the list goes on. Again, not in our control.
  3. Time in the market is what is in our control. It has been proven across all markets that consistency of returns increases by time “n”. Also, there is no other legally investable asset class that can match equity returns and it has been proven time and again. If equity returns move down to 12% then the other asset classes will be down further by 4-5%, i.e. 7 to 8% max.
  4. Look at pure equity investments only for financial goals that are 5 years plus in horizon. Once we do that checking whether it has gone down or up in year 3 or 4 does not make sense. Also, given the criticality of a goal, whether negotiable or non-negotiable, do proper planning so that a correction in the last year of the goal erodes your corpus making the goal unviable. If it’s negotiable, then you have the luxury of postponing the goal until you reach the desired corpus
  5. Conviction in equity investing. Every time when the market tanks if you start doubting whether you made a wrong choice of asset class there is no end your misery. Typically one review per year is good enough. If your proportionate allocation to equity is significant, then once in 6 months is fine.

<Blog # PenguWIN 1069 – Navigating Tough Times in Stock Market>

PenguWIN Turns 5!

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Greetings from PenguWIN:

Today, we are completing 5 years of business and stepping into 6th year. It was on 4th July 2014 that we started this journey and we have made good progress so far; thanks to our clients, friends and well-wishers. Businesses like us thrive on references and the experience that we are able to offer to clients. I sincerely request you to provide your support on this.

PenguWIN Turns 5!

There are a couple of observations that I wanted to share. It might not be new but given the importance, reinforcement would definitely help:

Equity as an asset class is proven to give the maximum returns over a long-term period, longer the better. That does not mean that 50 or 75% of our investments needs to be in equity and the allocation to equity required varies from person to person. However, I come across 2 types of investors:

  • Investors who continue to believe that they don’t want to take any risk and invest only in guaranteed return instruments like Bank and Postal FDs, Provident Funds, Bonds. However, even pension money and provident fund money gets invested in Equity and Corporate bonds (Mutual Funds) as guaranteed returns of 8.5% is too high a number to sustain. Risk is there in all aspects of life. Rather than avoid risks, we should be able to manage it effectively. Is it possible to stop driving saying accidents are increasing or avoid a bypass surgery as there could be a negative outcome?
  • While the first type of investors are totally risk averse (though changing slowly) the second type of investors think that small investments in equity will take care of their corpus requirement. For an investor who takes home a salary of 1 lakh/month, having a 10 L sedan car, living in an apartment valued 75 Lakhs with a home loan of 60L, a SIP of 10k/month will not make a difference. Assuming a return of 12%, 5 years investment totalling 6L will result in a corpus of approx. 8 lakhs, which is too small a number to make an impact. In 5 years, the person’s salary would have doubled but instead of a proportional increase in SIP, they continue with the same number of 10k/month.

Retirement is one of the most critical goals for us and given the increasing lifespan, lifestyle related diseases that is affecting people at an early age, shortened career span of people in certain industries, this is an area where meticulous planning and tracking needs to be done to ensure a sufficient corpus.

Consistency in returns from equity increases with time. While the initial years will have wild swings of corpus returns, they will stabilize over time. When we say that 5+ years is the time horizon for equity investments, it is based on business cycles and historic return pattern. Rather than looking at the returns from equity funds on a continuous basis and trying to change the fund, time in the market or duration of investment is important. That does not mean that we have to stick with funds with below average performance for a long time but allow that decision to the financial advisor

Once again, we thank you for your support and will continue to conduct business with utmost sincerity, keeping clients interest first.

Games are won by players who focus on the playing field — not by those whose eyes are glued to the scoreboard. – Warren Buffett

<Blog # PenguWIN 1068 – PenguWIN turns 5!>

Deepavali 2018 and SIP for My Retirement

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Deepavali is a special day for most of us. During my childhood days, Deepavali used be my favourite day in the entire year, more precious than my birthday, last day of school closing for annual leave or other festival days. Its not the new clothes, savouries, sweets, meet and greet family and friends that made the difference but the Crackers! Things have changed a lot in the past 2 decades, when the interest level for crackers has waned significantly, even among small children. Ironically, the courts decide when the crackers are to be burst, day, date and time and mostly, the entire family gets glued to the idiot box!


Dhanteras is celebrated all over India on the 5th Nov, today and marks the beginning of Deepavali Celebrations! People pay respect to Lord Kubera and Goddess Lakshmi during this time. There is a long-standing custom of buying gold during Dhanteras. It is believed that a symbolic buying of gold, silver, jewellery, vehicles, property will act as a protection against ill will and bring good luck to every family member

“Goal based” investment has been gaining traction over a period of time. Among goals including buying a new house, medical corpus, world tour, kids’ higher education, retirement planning and creating a corpus for a trouble free (atleast w.r.t. to money) Golden age period is extremely critical. Various research studies show that Indians, relatively, attribute less importance to this when compared to people in other nations

We, typically give importance to our current needs like house, overseas vacations, kids education, marriage and tend to start thinking about retirement only in late forties or early fifties. In the current competitive world where disruption is the order of the day, unless we start thinking about retirement (I am referring to the cash flow part and not sitting in an easy chair and reading a newspaper free of work pressure!), early in our life, its not going to be a smooth ride. Unlike the government and public sector jobs, people working in private sector, professionals, business face the threat of stable jobs till 58 or 60 years. Retired people struggling with penury is becoming common now and more so since we have very little support from the government.

During this week from today to Friday, we are having a awareness drive to invest for retirement by initiating a SIP in Mutual Funds to emphasise the importance of Retirement goal and also use the auspicious period of Deepavali to protect us during the Retirement phase. I am anticipating every investor to contribute a new SIP this week (we have 8 already created even before publishing this note as and when I interacted with a few investors today) with the theme of “SIP for My Retirement”  

SIPs can be as low as 1000/- per month and I want to use the opportunity for everyone to participate. Whether its 1000/- or a 1 lakh SIP does not matter but inculcating the practice to start building the retirement corpus is. While a SIP of 1000/- rupees or 1 Lakh may not be sufficient for retirement depending on our lifestyle, needs among others and requires a separate retirement planning session to figure out the corpus, we can be sure that everyone of us have started thinking about retirement.

I am not initiating a business drive with this and the intent is to have maximum number of people to participate rather than the business volume. I will be publishing the number of Individuals who participated in this initiative, not names or volume, next week. The statistics will be interesting to see how many can be nudged to start thinking and investing using this opportunity. Please don’t worry about the size of instalment and the key is to participate for the cause of “My Retirement” Read it as your retirement (and not mine by creating new business ?). Its probably a little late in the day but I was reading an article today morning which dwelled into challenges faced by retirees and took the cue from that.

Request you to send in a mail or message indicating the amount per month and we will work on setting up the plan with goal marked as “My Retirement”

<Blog # PenguWIN 1063 – Deepavali and SIP for My Retirement>