Financial Cocktail Samosas Bitesized Money Morsels For You 12/05/21

Loss Aversion Bias – are you fearful of all bad things that will not happen!

Have you heard the famous dialogue – ‘Jo Darr gaya so Marr gaya’. It is rightly said that ‘Fear of losing is more than the pleasure of Gaining’.

Loss aversion can significantly impact our own decisions and lead to bad decision-making. Nobody wants to lose but the fear of incurring losses prevents gaining even by taking calculated risk.

Always ask what the worst outcome would be if the course of action was taken and rationalize if it’s worth taking action.


If we wait too long to exit a losing investment or spend more money to recover lost money, then we definitely are experiencing the loss aversion bias. This behavior adversely affects all our investments and associated decisions.

Do not invest your emotions in the market. Consult a financial advisor, who will not only help in planning your finances but will also keep your investment behavior in mind and advise you in navigating through your investment decisions in the best possible manner.

Happy Investing!

(Contributed by Gagandeep Kaur, Asst Manager, Team Vikrant, Hum Fauji Initiatives) 


Should you buy Gold this Akshay Tritiya on 14th May, Friday?

Gold prices had peaked at about Rs 58,000 per 10 grams (a Tola, for 24 Carat Gold) in Aug 2020, reached a low of about Rs 45,500 in Mar 2021 and have started rising again, all this in fits and starts. Should you buy Gold now especially with the auspicious Akshay Tritiya just round the corner? Where is Gold finally headed?

Gold usually exceeds performance expectations whenever there are heightened uncertainties and volatility in the markets. That’s why it is not surprising that the Covid-19 outbreak triggered the peaking of its prices late last year.

Not only this, Covid has brought abundant cash liquidity in the world, leading to peaking of all metal and commodity prices which ultimately will increase inflation in times to come, RBI’s resolve to the contrary notwithstanding.

Even otherwise, the love for this yellow metal is not going away any time soon from our psyche.

So, it makes sense to get into Gold now as an investment.

Having gold in your portfolio can also provide you a cushion against heightened market risks and uncertainties. But nobody can predict the movement of prices of such investments. Please never buy Gold at one go – you never know whether prices will crash immediately thereafter!

What is the best way to buy Gold then?

Buying jewellery with high making charges would be a waste of your money. Digital forms like Sovereign Gold Bonds (SGB) or Gold ETFs are better options if you’re putting in bulk money and Gold Mutual Funds if you want to invest small amount regularly. Even here, beware of the peculiarities of each, like SGBs have a long lock-in period.

Considering that the Gold prices could fluctuate a lot, out of these various options, we recommend you going in for a SIP (Systematic Investment Plan) in a Gold Mutual Fund by putting in a small amount every month – and what better day to initiate it than on the auspicious Akshay Tritiya day or week or month!

(Contributed by Priya Duggal, Financial Planner, Team Vikrant, Hum Fauji Initiatives) 


Don’t Play Kabaddi with your money!

A large number of investors like to play Kabaddi with their money. They act as a raider (rather than an investor), who raids the opponent team (that is the equity markets), try to tag out as many of the defenders as possible (ie invest in ‘n’ number of stocks or equity mutual funds schemes suddenly) and hope to return to their own half of the court (ie come back an unopposed winner) without even being touched by the defenders – and all this in a single breath!

Playing Kabaddi with your money, hoping that the luck would always be on your side, could sometimes give you profits as a beginner’s luck but it will not always happen so.

We recommend you to play this money game more as a patient Test cricket match – sticking to fundamentals, doing proper asset allocations, looking at your future goals and adequate diversification, rather than jumping in and out of the game as if in a Kabaddi match.

And if you cannot do all this yourself, take advice from an experienced financial planner, like the way you consult a professional doctor or a CA or a lawyer, to build a fundamentally strong portfolio to last your life time, and beyond. Initiate your children also in a similar manner so that they become investors, rather than punters.

Please remember that a portfolio built on strong fundamentals might grow slower initially but it would be steady, not collapse just at the whiff of strong winds and tackle disaster-like-situations in a better way.

Equity markets have always been uncertain and the only sure strategy to tackle them is to play them sure-footed rather than as a touch-and-go kabaddi game.

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