feb for pdf-1

FEBRUARY 2022 FROM EMOTION TO COMMOTION IN INVESTING “What is the market thinking?” bubble eventually burst and markets equity-oriented funds but also in Divya’s eyes glared and then rolled corrected, there was a costly price to Fixed Income funds, so that her asset over in disbelief, scanning past the pay for this learning. alloca on is always maintained. pulsa ng green numbers on her Divya earnestly tries to live by the screen. Equity markets had rallied Have you come across someone who maxim ‘buy low, sell high’. However, strongly yet again today, and the is clearly unwell, yet keeps she now realizes that it’s easier said Sensex was once again well past the reassuring himself that he is fine and than done! When markets are rising, 60,000 milestone. “How can these does not require any medical help? news flow is posi ve all around with valua ons ever be jus fied?” she Or the pessimist, who ignores euphoric gains being made. It’s quite shook her head. It seemed just a few everything posi ve around? easy for greed to take charge, and months ago that her brilliant Similarly, investors with a pre- one ends up buying high. Similarly, investment call to exit equi es, when conceived no on o en focus on when markets are falling and there is the Covid-triggered tumble had just informa on that validates their despondency all around, fear takes started in early Feb’20 had helped belief, turning a blind eye to obvious over and one ends up selling low. side-step the colossal loss that contradic ons. For instance, Emo ons can create quite a followed. With the economy individuals having the pre-set view commo on! fractured through unprecedented that tradi onal investments like fixed lockdowns and the vicious virus deposits are ideal, focus only on the What if a fund had an inbuilt variant s ll around, who could have safety aspect of the investment to mechanism to avoid such emo ons imagined that markets would just validate their stance. They turn a and biases? What if the fund could be ignore the ‘reality’, and bounce back blind eye to data that may show that designed to buy more when markets to recover not just lost ground, but these such investments o en do not are cheap, and sell progressively as power ahead to all me highs? This even beat infla on, and are fast markets become expensive, turning breathless climb had provided her no losing favour due to sub-op mal market vola lity into an advantage reasonable window of correc on to returns. This ‘confirma on bias’ for you? That’s where Balanced redeploy into equi es. Did she just paralyzes their ability to make Advantage Funds come in. Unlike miss out on a historic rally? “Where ra onal decisions. other equity or debt funds, Balanced did I go wrong?” she mu ered. Advantage Funds can significantly Like Divya, investors may also lower your alloca on to equi es It is only human to be emo onal. A overes mate their knowledge and when markets are expensive, and life without joy or anger, fear or ability to me the market. Their increase this alloca on when greed can be like food without recent success may ignore the data m a r ket s get c h e a p e r. S o yo u flavour, an engine without fuel, a and the wisdom of celebrated automa cally gain by buying low and body without a soul. Yet, when it investment gurus who have selling high, without having to take comes to inves ng, do emo ons advocated against trying to me the any addi onal ac on and staying help? Or do they tug us away from market. Divya may already know the invested in the same fund. Certainly colder, more ra onal but profitable indica ve past data: that if she an a rac ve op on to consider? decisions? stayed invested in the market for 10 years, she could have made 14% p.a. As Divya clicks through the payment Behavioural economists have long returns. However, had she missed link to start her investment into a argued that our inherent biases just the 10 best days, her returns Balanced Advantage Fund, she impede ra onal decision making. would have plummeted to just 8% realizes that she let her emo ons and Such biases are evident when one p.a., a staggering lost opportunity. biases get in the way of her studies past trends and investment This ‘overconfidence bias’ possibly investment decision which cost her behaviour, of course now having the fueled by the recency effect can dearly. She recognizes that when it luxury of hindsight. For instance, o en cause havoc in even the best comes to inves ng, it is best to keep some may remember the ‘dot-com structured por olios. her emo ons at bay. bubble’ at the start of this century. #InvestmentMeinNoEmo on! Valua ons for IT stocks rocketed up, Being a seasoned investor, Divya and investors piled in to buy stocks at understands the fundamentals: that VISHAL KAPOOR unprecedented valua ons. The she must start with her investment CEO, IDFC Mutual Fund power of ‘social influence’ and the goals, iden fy her risk-return fallacy of ‘following the heard’ driven appe te, diversify effec vely by the ‘fear-of-missing-out’ seems through an asset allocated por olio quite evident now, but even the most that balances growth, liquidity and seasoned investors fell prey to this safety. She knows that she must cost strong urge. Of course, when the average through SIPs in not just

My Story GLORYGUN FOR Gagan Narang Padma Shri & Khel Ratna Awardee “When kids my age were picking up toy cars, I used to buy toy guns.” A small boy at the age of two, sport taught me was humility. I have learn is that nothing comes for free. found his passion for shoo ng seen success as well as failure and You have to work over me to at a carnival! At one of the both are easy to handle when you achieve excellence. There is no balloon shoo ng counters, he shot the have humility. Today, I am at a lucky medal or a fortunate win for fine balloon streak with such ease that posi on where I can relate with athletes. Even the wins that look it le everyone spellbound. Today the shooters of all ages and likewise. easy or one-sided, are actually the same boy is known as one of the finest This is because I know some mes result of the hard work that the rifle shooters in the country, and has the sport can make you feel like a athlete had put in to make it look so made India proud at interna onal king and the next moment, it can simple. Hard work and discipline podiums as well. Sounds filmy ha..? But break you. And I find myself can take you places but it is tough to that’s the true story of hard work, fortunate to have been through all have both these quali es perseverance and passion of Khelratna this and be what I am today. consistently. & Padma Shree Awardee Gagan Narang. He is the first Indian air rifle 3. SHOOTING AS A GAME BRINGS A 7. YO U R A C A D E M Y, “G U N F O R shooter who qualified for the London LOT OF MENTAL STRESS, BECAUSE GLORY” IDENTIFIES AND TRAINS Olympics and earned a Bronze medal IT'S ALL ABOUT FOCUS. HOW DO RAW TALENT. HOW DO YOU PLAN for the na on. Gagan has added YOU HANDLE THIS STRESS AND TO TAKE IT ACROSS INDIA? numerous feathers in his cap, that STAY FOCUSED? It is already spread across the define his brilliance. He’s a man with Yes, it is stressful but then it is all country. We have our academies in humble beginnings and has always about how you overcome that all major states and our team is kept himself rooted to the ground. He stress and regain your focus. There working day and night in finding has also given back to his loved sport in have been mes when I felt low, let talented shooters and polishing the form of Gun for Glory shoo ng down, or even disillusioned. But their skills. We already have academy and Gagan Narang Sports then, you have to come out of the hundreds of na onal and Founda on. His humbleness and gloom and look at the bigger interna onal medals won. our humanity is what makes him an icon picture. For me, the bigger picture shooters and our aim is to produce for the youth. We caught up with was to earn an Olympic medal. I Olympic champions in the coming Gagan and tried to know his journey so have faced financial as well as years. far.. emo onal crises. There have been mes when I had doubts over my 8. Y O U A R E A N A V I D 1. YO U C H O S E S H O O T I N G , A N abili es and techniques. But with PHOTOGRAPHER. WHAT MADE OFFBEAT SPORT AT A TIME WHEN the right support and people YOU CHOOSE WILDLIFE THE RESOURCES WERE VERY around you, these hurdles can be PHOTOGRAPHY? SCARCE. WHAT MOTIVATED YOU crossed. It started gradually. I always liked TO BECOME A SHOOTER? photography and prac ced it 4. DO YOU THINK HAVING THE RIGHT whenever I got opportuni es. My It started with curiosity that ATTITUDE ACTS AS A CATALYST FOR previous coach Stanislav Lapidus gradually developed into love for WINNING? too was fond of photography and the sport and then passion. My I won't call it a catalyst. It is rather we both used to click pictures mo va on was always the sport the ac ve force that drives you and whenever we wanted to take a itself. The scarce resources only mul plies when you hit the right break from rifle shoo ng. However, pushed me to overcome the chord. Having the right a tude and because of shoo ng, I couldn't challenges. I wanted to excel in the posi ve people around you makes a spend me on photography. I sport despite riding against the de. lot of difference. started wildlife photography a er winning my Olympic medal in 2012. 2. YOU HAVE BEEN PRACTICING 5. TELL ME ONE WORD FOR THE SINCE THE AGE OF 14, HOW EMOTION YOU FELT WHEN YOU 9. ONE LAST QUESTION. HOW DO WOULD YOU DESCRIBE YOUR WON US THE OLYMPIC MEDAL! YOU KEEP THE SPIRIT OF JOURNEY? Relieved! SPORTSMANSHIP ALIVE IN YOU..? Once you live the life of an athlete, it Well, it has been a very good 6. EVERY GAME TEACHES US A comes naturally to you. The spirit experience for me. I have been LESSON. WHAT IS ONE IMPORTANT stays with you throughout your life. through a lot of stages in my career, LESSON YOU but one thing was common in all -- HAVE LEARNT AS AN ATHLETE? learning. I have learnt a lot from my The biggest lesson any athlete can experiences and grew as a shooter as well as a human being. One more thing that this

Wellness Ed tor l A HEALTHY MOUTH CAN SHAILLY SETH BE A GREAT ASSET CEO, 12months Our teeth have such an who have healthy gums are also History has me and again proven important role to play in 70 percent less likely to develop that the biggest gains have been our lives. They help us Alzheimer's disease than those made in the most fearful condi on. chew and digest food, they help us who have suffered from gum People o en make decisions that are to talk and speak clearly and they disease over a long period of me. coloured by their biases that makes also give our face its shape. A them act emo onally or make smile also has other day-to-day HAVING A HEALTHY mistakes in processing informa on. benefits. It can give us greater BABY As humans our fears or stress confidence, as well as influence Pregnant women with healthy situa ons are bound to push us to fall our social lives, careers and gums may be around three mes in the mind traps. Inves ng based on rela onships. Because of this, it less likely to have a baby that is emo on (greed or fear) is the main only makes sense to give our oral premature, reducing the risk of reason why so many people are health the best care possible. having a low birth weight. buying at market tops and selling at Research says there is a one-in- market bo oms. Usually they Good oral health can have so four chance that a pregnant underes mate the risks associated many wonderful life-changing woman with gum disease could with investments and that’s why benefits. A healthy smile can truly give birth before 35 weeks. This is investors some mes make transform our visual appearance, because gum disease raises the subop mal decisions based on the posi vity of our mind-set, as levels of the chemicals that bring emo on. Rupee-cost averaging and well as improving the health of not on labour. diversifica on are two approaches only our mouth but our body too. that can help to make consistent But what exactly are the health MAINTAINING OUR decisions that are not driven by benefits of having good oral APPEARANCE emo on. The key to longer-term health? Keeping our teeth success as an investor is staying the clean and healthy can help us course through short-term vola lity. KEEPING OUR TEETH steer clear of bad breath FOR LIFE (halitosis). Bad breath is very Having said that, the current market common and is o en caused by a scenario does offer an opportunity to By brushing our teeth buildup of plaque and is a the daring few who know how to read twice daily, maintaining a low-in- symptom of gum disease and and play through this vola lity and sugar diet and regularly visits to tooth decay, as well as being maybe perhaps make a killing! The our dental professional, we can embarrassing and undesirable. tension due to the Russia-Ukraine help reduce the risk of such Another very common condi on conflict is keeping the markets on its diseases like dental decay and that can affect our appearance is edge. Sad, but true, the stronger the gum disease – both of which can tooth staining. Tooth staining is belief that worse things will happen result in tooth loss. Tooth loss natural and comes with the ‘wear to the market, the be er the through dental decay and gum and tear’ usually associated with opportuni es for profit! Hence a well- disease are almost en rely smoking, or drinking lots of tea, read, well-informed or a well-guided preventable and there’s no reason coffee or red wine. Stained teeth investor knows how to steer through why, with a good daily oral health are not usually harmful and tends the storms of the market. rou ne, we cannot keep our teeth to have li le impact on the health for life. of our teeth. Although having Understand your own risk tolerance stained teeth can make us feel a and don’t let your biases overpower REDUCING THE RISK OF li le self-conscious. In most cases you. Rather stay calm and implement DISEASE we should be able to prevent a well thought out strategy that will surface staining with regular help you to avoid the common When we have gum disease, the cleaning, while more stubborn inves ng mistakes! bacteria from our mouth can get stains may need to be tackled by a into the bloodstream. It then dental professional. “It’s wai ng that helps you as an produces a protein which causes investor, and a lot of people just can’t the blood to thicken. This means So, contact your den st as soon as wait” that clots are more likely to form, an oral health problem arises. and the heart is not ge ng the Taking care of your oral health is -Charlie Munger nutrients and oxygen it needs, an investment in your overall resul ng in increased risk of a health. See you all in the next issue. heart a ack. Similarly, gum disease can also cause DR. MONICA SAXENA inflamma on of the blood vessels, B.D.S., F.A.G.E blocking the blood supply to the Varanasi brain, leading to a poten al stroke. New research has also shown that we are more likely to develop diabetes if we have gum disease. REDUCING THE RISK OF Teeth are like fingerprints. CANCER ANDDEMENTIA No two people have the By keeping our teeth and exact same ones, gums healthy we are more likely to even iden cal twins! reduce our risk of certain cancers, par cularly in women, as well as some forms of demen a. Those

Money Matters SAVE TAX + BUILD WEALTH MONEY BEN = ELSS GYAN THE ADVANTAGES OF saving diversified equity ELSS OUTWEIGHT THE funds with a three-year BENEFITS OF OTHER lock-in. TAX SAVING INSTRUMENTS As a young taxpayer, you Conventional ELSS Funds can take advantage of MYTH: One needs to have a Tax Saving the dual benefit of demat account to invest in Instruments Lower lock-in inves ng in ELSS i.e. mutual funds. Growth potential avail tax deduc on REALITY : Holding mutual Less risky, of Equities under sec on 80C and funds unit in demat account stable return Tax Saving the growth poten al of is absolutely optional, Tax saving Option to invest equi es over a long- e x c e p t i n r e s p e c t o f K through SIP & benefit term by inves ng every exchange traded funds. from Power of year in ELSS. While older Compounding taxpayers can also invest For Health Insurance, who all come Can continue in ELSS to avail tax under ‘Immediate Rela ves’? investments benefit, the equity risk after lock-in inherent in ELSS a. Parents and Children demands a longer b. Spouse and Children It’s already February and we are reaching investment horizon c. Parents, Siblings and Children the end of financial year. Most of you would which they may lack. d. Parents, Spouse and Children have invested in the tax saving schemes by As men oned earlier, now. But how about saving tax while now not much me is Whatsapp us your answers crea ng wealth? The answer to this le for inves ng in tax along with your name and number ques on is to invest in ELSS. The advantages saving schemes. If you of Equity Linked Saving Schemes or ELSS s ll haven’t invested in on “6389321212”. outweighs the benefits of other tax saving the ELSS funds but want Early bird entries shall win exci ng prizes! instruments. to, then most probably the only op on le for WRITE TO US As the name suggests, Equity Linked Saving you is the lumpsum. You FOR DISCUSSION Scheme is a type of Mutual Fund that can divide the lumpsum primarily invests in stock market or equity. into a few parts and If you wish for a FREE Investment Por olio Investments of up to 1.5 Lac done in ELSS spread it across the evalua on, write to [email protected] Mutual Funds are eligible for tax deduc on remaining few weeks of with “Por olio Wellness” as the subject or under sec on 80C of the Income Tax Act. The t h i s fi n a n c i a l ye a r. whatsapp to us on “6389321212”. Our only reason why one should pick ELSS funds Staggering investments team shall reach you for discussion/ over any other equity fund is for the in ELSS fund over the appointment. addi onal benefit of tax saving. And another last few weeks isn’t edge ELSS has over other tax Saving exactly like SIP- instruments is the shortest lock-in period of spreading-bets but 3 years. This means you can sell your nevertheless you can go investment only a er 3 years, from the date ahead with it. But please of purchase! However, to maximise returns make sure that if you from ELSS funds, it is recommended to keep require ELSS funds for your investments intact for the maximum tax saving next year dura on possible. If you have an ELSS SIP (April 2022 to March (Systema c Investment Plan), each 2023), then it’s be er to instalment has a lock-in period of three start a SIP in ELSS funds years, which means each of your at the start itself. That is instalments will have a different maturity the most prac cal date. In short, ELSS funds are nothing but Tax approach that you can easily implement. - Source Internet 12months Consultancies Pvt. Ltd., Rudra Vatika, #22, 153 Shri Ram Nagar Colony, Bazardiha, Varanasi-221106 T: +91 - 6389321212 | E: [email protected] | W: www.12months.in Disclaimer: Views and opinions expressed in the newsle er are not necessarily those of 12Months, or its editor. The newsle er is solely meant for the purpose of awareness. We do our best to verify the informa on published, but do not take any responsibility for the absolute accuracy of the content. 12Months does not accept responsibility of any investment or other decision taken by readers on the basis of informa on provided herein.