“One of the key things I have learnt over the last 20 years is that the only way to achieve success in investments is by having a disciplined approach and keeping expectations in check”, says Raghvendra Nath, MD, Ladderup Wealth Management.

A Chartered Financial Analyst, Nath has about 17 years of experience in the financial services industry.

He was earlier associated with Aditya Birla Money and Birla Sun Life Asset Management.

Here’s more on his money mantras.

What was your first investment and how did you zero in on it?

My first investment was in SIDBI rights renunciations in 1993. I was doing my MBA then. I identified it while going through a business newspaper.

I did make some money, but I do not remember how much.

What is your best and worst investment? What lessons have you learnt from these experiences?

My best investment till date has been buying my current home in 2005. Honestly, the way real estate prices have moved up in Mumbai, it would have become a pipe-dream otherwise.

The biggest lesson here obviously is to catch the cycle at the right time. And, that a loan is not always a bad thing. The next best investment has been SIPs in equity funds. Like most, I have had my share of bad investments. My worst investment was parking money in an IT fund in 2000 after borrowing some money.

I lost most of it in the next three years and as I had to repay the borrowed amount, I exited at a completely wrong time. I drew one of my biggest lessons in life that always take risk to the extent you can tolerate.

In the world of investments, there would always be wrong decisions. However, a successful investor would identify such investments much earlier and cut down on his losses.

How is your allocation to different asset classes currently? How do you balance your allocation from time to time?

Presently I have almost 30 per cent in real estate, 50 per cent in equities and 20 per cent in fixed income. I have negligible investments in gold. I sold one of the houses that I had bought for investment purposes last year, as I am a little bearish on real estate. I would like to maintain this proportion loosely. I do not intend booking profits in equities any time soon. I would like to see another major bull cycle before I do some profit booking.

Have you invested overseas?

I invested some money in an international equity fund in 2007. That actually paid off well in the global meltdown that followed, as the fall was lower than the domestic markets. I am now contemplating diversifying more in international equities.

Since interest rates in India are already quite high, I do not see any merit in investing in fixed income outside India as the exchange rate fluctuation can add to the risk.

How important is the role of a financial advisor?

I think an advisor is very essential to build your wealth in a disciplined manner and to avoid mistakes. A good advisor always keeps the risk of the portfolio in mind and therefore helps the client have a proper asset allocation.

Another reason to have an advisor is to identify investment opportunities in time. Most individuals cannot keep track of the developments in capital markets continuously.

A wealth advisor is much better equipped to identify such opportunities. Maintaining one’s financial health requires a lot of discipline, assessment and information. A good wealth advisor can ensure that your financial health does not deteriorate because of one or two bad decisions.

What is the best way to save for retirement?

The best way to build a solid retirement corpus is to invest systematically each month.

A large portion of the investment should go into equities as the period of investment is very long and the probability of going wrong over such long horizon is very low. A small portion should be allocated for investments such as PPF that are long term and tax efficient. I am following the same principle for my retirement fund.

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