Risk in Personal Finance

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Risk of being part of AIFW!

Before objective analysisRisk of not digging deep

After objective analysis!Risk of digging deep!

Paralysis

Before After

Priorities

Power of compounding does not matter for ~ 5Y or less

Popularity

“It Seemed Like a Good Idea at the Time”

A minimalist portfolio

Asan Ideas for Worthless information!

“Ashal Sir, Please name the two mutual funds you hold”

When Ashal says MDBSC* ….

A Mutual Fund SIP is Hope, Not a Strategy!

Currently there are ten funds that are 20-years old

In 2036, there would 500+ 20-year old funds!

Mutual Funds are not LIC polices!

A Mutual Fund SIP is Hope, Not a Strategy!

Systematic investing + Systematic Risk Management

• Clear Asset allocation • Watch for deviations regularly (yearly first and

more often later)• Rebalance (once a Y, once every few Y and

more often later)• Quit while ahead

All this is possible with MDBSC!

Star Ratings

How to review a mutual fund SIP?

Do we have a review strategy in place?

How to review a mutual fund SIP?

Buying on dips!

Buying on dips = SIP!

How many of us are going to compare!

Buying physical gold <> Investing in gold

Aim: accumulate gold for daughter’s marriage.Aim: Hedge against inflationAim: Reduce volatility in my portfolio?

Buy physical gold or use gold funds, etfs . Bonds?

Gold always moves up!

Riskometer

NAV always moves up!

Recency Bias - 1

Risk Ignorance

FD rates have gone down, so can I invest in debt funds?

Can I use balanced funds for SWP in retirement?

Can I invest in sector funds for next 3 years?

Liquidity Ignorance

NPS only for tax deduction

Use tax-free bonds to get tax-free returns

Real Estate

You cannot choose the “right” mutual fund or stock!

Invest in “good stocks” and forget about it!

Please suggest a mutual fund to start SIP for next 15 years.

Stock investing vs Mutual Fund investing

Timing the Market

Possibility vs probability

Hot-hand fallacy

Risk in Personal Finance

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