How to invest in current market conditions?

/ M. Pattabiraman / 10 Comments

Last Updated on

pattu author each postBy M. Pattabiraman   

Does this question sound familiar? Bet it does. This is probably one of the most popular questions asked in any investor meet or television show.

qmarkThe answer is surprisingly simple and the reaction to the answer, in most cases, unsurprisingly indifferent.

In academic circles we have a saying. ‘No question is silly. However, some answers can be’.

So assuming we believe in this saying, is titular question silly or stupid? NO

So what is the answer?

The rules of investing and therefore the answer to this question is independent of current market conditions

  • Meaningful Investing requires:
    • a goal and a time frame
    • a knowledge of different kind of risks
    • an understanding that exposure to a different asset classes (stocks, bonds, gold etc.) will reduce portfolio volatility
    • diversification within an asset class
    • there is a couple of more things like rebalancing. However, this should do quite well for a start.

End of answer.

If investors do not understand this answer, they have two choices and only two choices:

  • Learn. It will take a little bit of time and  consistent effort.

OR

  • Get professional help. Consult a good financial planner. The fee that you pay will be worth it. You can choose to remain ignorant, provided you trust the planner and implement his/her advice.

Do you agree that the reaction to this answer will be unsurprisingly indifferent?

~~~~~~~~~~~~~~~~~~~~

  • I ask you, ‘how to run a marathon?’
  • You tell me, ‘you need to train for many months. Starting with short distances and then gradually increasing the distance’.
  • To this I say, ‘that is fine. Just tell me how to run a marathon?’
  • How would you react?
Related articles
Do share if you found this useful

Do check out these related articles:

About the Author M Pattabiraman author of freefincal.comM. Pattabiraman(PhD) is the author and owner of freefincal.com.  He is an associate professor at the Indian Institute of Technology, Madras since Aug 2006. “Pattu” as he is popularly known, has co-authored two print-books, You can be rich too with goal based investing (CNBC TV18) and Gamechanger and seven other free e-books on various topics of money management.  He is a patron and co-founder of “Fee-only India” an organisation to promote unbiased, commission-free investment advice. Pattu publishes unbiased, promotion-free research, analysis and holistic money management advice. Freefincal serves more than one million readers a year (2.5 million page views) with numbers based analysis on topical issues and has more than a 100 free calculators on different aspects of insurance and investment analysis. He conducts free money management sessions for corporates  and associations(see details below). Previous engagements include World Bank, RBI, BHEL, Asian Paints, TamilNadu Investors Association etc. Contact information: freefincal {at} Gmail {dot} com (sponsored posts or paid collaborations will not be entertained)
Want to conduct a sales-free "basics of money management" session in your office?
I conduct free seminars to employees or societies. Only the very basics and getting-started steps are discussed (no scary math):For example: How to define financial goals, how to save tax with a clear goal in mind; How to use a credit card for maximum benefit; When to buy a house; How to start investing; where to invest; how to invest for and after retirement etc. depending on the audience. If you are interested, you can contact me: freefincal [at] Gmail [dot] com. I can do the talk via conferencing software, so there is no cost for your company. If you want me to travel, you need to cover my airfare (I live in Chennai)

Connect with us on social media

Content Policy

Freefincal has original unbiased, conflict-of-interest-free,  topical reports, reviews, commentary and analysis on all aspects of personal finance like mutual funds, stocks, insurance etc. All guest authors and contributors to the site also do not have any conflict of interest. If you find the content useful, please consider supporting us by (1) sharing our articles and (2) disabling ad-blockers for our site if you are using one. No promotional content.  We do not accept sponsored posts and link exchange requests from content writers and agencies. This is our privacy policy Our website is non-profit in nature. The revenue from the advertisement will only be used for hosting charges, domain registration charges, specific plugins necessary for traffic growth and analytics services for search engine optimisation.

Do check out my books

You Can Be Rich Too with Goal-Based Investing

You can be rich too with goal based investingMy first book is meant to help you ask the right questions, seek the right answers and since it comes with nine online calculators, you can also create custom solutions for your lifestyle! Get it now.  It is also available in Kindle format.
Gamechanger: Forget Startups, Join Corporate & Still Live the Rich Life You WantGamechanger: Forget Start-ups, Join Corporate and Still Live the Rich Life you wantMy second book is meant for young earners to get their basics right from day one! It will also help you travel to exotic places at low cost! Get it or gift it to a young earner

The ultimate guide to travel by Pranav Surya

Travel-Training-Kit-Cover This is a deep dive analysis into vacation planning, finding cheap flights, budget accommodation, what to do when travelling, how travelling slowly is better financially and psychologically with links to the web pages and hand-holding at every step.  Get the pdf for ₹199 (instant download)

Free Apps for your Android Phone

All calculators from our book, “You can be Rich Too” are now available on Google Play!
Install Financial Freedom App! (Google Play Store)
Install Freefincal Retirement Planner App! (Google Play Store)
Find out if you have enough to say "FU" to your employer (Google Play Store)

Blog Comment Policy

Your thoughts are vital to the health of this blog and are the driving force behind the analysis and calculators that you see here. We welcome criticism and differing opinions. I will do my very best to respond to all comments asap. Please do not include hyperlinks or email ids in the comment body. Such comments will be moderated and I reserve the right to delete the entire comment or remove the links before approving them.

10 Comments

  5. I would say “Run with your legs” and experience even though 100 people can say how to run its you have to experience.. Similar in case of investing.. Learn and come up with your own strategy.. what works for you can never work for others.. and you cannot ask anyone after 20 years or 30 years why things did not work the way you planned.. so be accountable and learn abt finance to the level what you should know and invest.. After all working till 58 is also not bad if your have passionate to work.

    Reply

  6. This post is very interesting and eye opener in precise manner. Dear Sir your post is too long some time. I like this post it is too short with behind lot of answer.
    This post is awsome.

    Reply

Leave a Reply

Your email address will not be published. Required fields are marked *