Tuesday, October 24, 2017

Learning the market tips

My encounters with friends and family over the New Year brouhaha was pleasant and encouraging

By Narayan Krishnamurthy

I met two senior citizen uncles and an elderly cousin sister approaching retirement in a few years from now. Uncle Mani used his usual banter to talk of how things were so different today compared to his times as an accountant with the Government of Tamil Nadu till a decade ago. Uncle Ram was more at ease resigning to the fact that he was happy that he moved with his children to Singapore about the same time and since then has been generally making the annual India visit for a change of season and to catch up. Cousin Uma was content listening to everyone, despite working for a PSU bank, dealing with the aftermath of demonetisation.

Read More

My conversation with them over a weekend set me thinking about how market gyrations alter mindsets, and could result in the desire to be better informed irrespective of one’s age. Uncle Mani never believed in investing in stocks and ten years after his retirement, I was surprised to note how he had taken to investing in stocks, by watching the TV everyday and reading up on the net.

He was candid enough to confess he lost some big money a few months ago, because he did not know of stop loss. He was eager to know what else he should be careful with when investing. He was very keen to continue investing and trading. He thinks, with a bit more of experience, he could handle others money too. He would have continued to do what he was doing but for the loss, which shook him of his wits, but also made him realise the need to know more to be a respectable investor and trader.

Uncle Ram was happy talking of not having to worry about managing any money. He had passed all that he had to his children, who had made sure all his financial needs were taken care of. He was a bit concerned with this arrangement, because he felt; it did not give him a clear idea on how much he could or could not ask his children when it came to money. He wanted to create some form of corpus for him to manage unplanned travel, like the one he made to spend time with me. It turned out that both the uncles felt I was the right person to get some tips from when it came to managing money.

During all this chat, cousin Uma was silent. She had the balance, poise and calm to listen to all this talk about investments, but kept to herself with occasional glances. At one point, she gallantly admitted that she does not do anything about investing money. She is enamoured by all the finance talk around her, but unable to participate. She confessed to hearing so much about investing as a branch manager when clients walked in or her own colleagues – junior and senior talk over lunch time. She was keen to start the new year on a better note with her finances. She did not know where to begin and that is when she opened about wanting to read and learn about investing.

The common thread was that they wanted to take control over their finances by formalising a process that would help them do it. The yearning to learn and be better tuned to investing money was an important milestone in the way they deal with money. I am sure there are several like them. As I spend time with financial advisors, product manufacturers and journalists, I feel we tend to oversimplify the issue of slotting investors as those who are ignorant or greedy. Sometimes we like to think that they are ignorant and greedy.

While I do my bit by promoting Outlook Money whenever someone asks what they could read to learn about investing, at the same time, I feel that by reading too much, one misses on the upside of learning on the go. To learn by asking, listening and actively seeking out information when their stakes are high is the key.

I am reminded of an incident at an airport lounge some years ago, where I observed a lady who must have been in her 80s, beam with joy, when the iPad in her hand started to play the song that she wanted to. No manual or help by her grandson would have provided that joy of self discovery for her. The learning for late bloomers, when it comes to money will happen because they have begun to seek it.