MIS UNDERSTANDING COSTS MONEY

*Interesting Story on Human Behavior* *Misunderstandings Costs Money* 

McDonald's launched its iconic Quarter Pound (1/4-pound burger) for $1. 

Another American Restaurant chain A&W, tried to compete by offering in 1/3-pound burger at the same price. 

Logically 1/3 is bigger than 1/4;But the product failed,Eventhough A&W offered a Bigger Burger at the same price of Mc Donald's smaller Burger. 

Do you know why ? Not because of  Mc Donald's Brand Name .  A& W was also a equally bigger brand at that time .

*Many customers thought 1/4 (a small: number) was actually larger than 1/3 as 4 it greater than 3 without realising that 1/4 is 25% o and 1/3 is 33%.

*Unbelievable,is it not? 

We also do the same here when it comes to investing . The same logic applies to investments.

 Misunderstanding costs Money.

Many people stick to fixed deposits (FDs) or bank accounts because they are simple to understand, but they fail to realize that mutual funds, with compounded annual growth rate (CAGR), Rupees cost averaging , can generate far better long-term returns, beating inflation.

Misunderstanding the math of investing can cost you significantly in the long run.

It should not happend to you as an investor , what happend to A&W .  

That's where Mutual Fund Distributor comes in to picture , and will guide you to identify which investment can provide you a long term wealth creation. 

And if you are keen on protecting your family by creating wealth , then nothing stops you to consult your Trusted Mutual fund Distributor Sridhar Rajasekar S -Shree Investments. 

Happy quality Investing days ahead.  

                  - Sridhar Rajasekar S  

                   - Shree Investments

STAY CALM STAY INVESTED DURING TURBULANCE

*Markets may bring Joy or Sad How you react matters*

Once upon a time, there was a merchant named Mr. Mohan , who had a son. 

Mr. Mohan owned a beautiful horse, which he used his business travels and transportation. 

One day, the horse ran away. 

The neighbours came over to Mr. Mohan and said, "What bad luck! Your horse is gone!". How you will do your business . 

Mr. Mohan calmly replied, "*Maybe so, maybe not, We'll see."*

A few days later, the horse returned, bringing with it three wild horses. 

The neighbours then came to congratulate Mr. Mohan, saying, "How lucky you are! Your horse has brought three more!". 

Mr. Mohan  again said, *"Maybe so, maybe not. We'll see."*

The Mr. Mohan's son started training one of the wild horses. However, while riding it, he fell and broke his leg. 

The neighbours. came to express their sympathy, saying, "What a misfortune! Your son is hurt!" 

Mr. Mohan replied, *"Maybe so, maybe not ,We'll see."*

Soon after, a war broke out, and all the young men in the village were recruited to fight for the country .

Mohan's son was exempted from military service due to his injury. 

The neighbours said, "How fortunate your son is, that he is spared from the war!" 

The Mr. Mohan  replied, *"Maybe so, maybe not. We'll see."*

The same applies to your Stock Market related investments.

 When the Market is going up Media will project it, there's so much return , this is good ,that is good , this will give 70% that will give 50% and so on. 

And when Market comes down again they will portray every thing has gone, so many lakhs of rupees vanished  etc etc.  

*They never tell you that down Market is the right time you have to be joyous,because it is the opportunity to create wealth by buying at low Price.*

Markets were never gone back to a state, which was at 5 years back. 

If we take it for a longer term, it was always moving upwards. 

So down Market is the right time to enter and all Blue chip companies available at a lower discounted price. So is the Mutual funds. 

Moral: *Don't be too quick to judge situations, as what seems good or bad today may change tomorrow*

What people say is not always the truth, and outcomes can change over time.

Instead of having impulsive reaction to good or bad situations for which you have no control over the outcome, choose how you respond to those situations with a balanced approach.

The Response :: 

*STAY INVESTED*  

*CONSULT YOUR TRUSTED MUTUAL FUND DISTRIBUTOR SRIDHAR RAJASEKAR S -SHREE INVESTMENTS*

The Common Question: Why Do I Need anAdvisor?

The Common Question: Why Do I Need an

Advisor?

Recently, a friend asked me, "Mutual funds are OK.

Good to create wealth . But why do I need a financial advisor to guide my investment decisions?" 

He argued that he could manage his investments 

using online tools, calculators, and readily available

fund ratings. 

His point seemed valid at first glance: with

digital platforms offering seamless transactions

and detailed performance data, why go to the

trouble of finding a good advisor?

However, the real value of a financial advisor lies

not in the basic services that technology can

replicate but, in their ability to bridge the gap

between potential and actual returns.

I asked my friend a simple yet critical question.

"Are you happy with the returns on your mutug

fund investments?" 

He admitted he wasn't. 

Despite investing in top-rated funds, 

his portfolio has significantly underperformed 

the NIFTY index over several years. 

Intrigued, I analyzed his Portfolio and uncovered the root of the problem

portfolio and uncovered the root of the problem.

While my friend had chosen good funds, his returns were lower than the funds' performance. 

The culprit? 

Behavioral mistakes. He had made emotional 

decisions, such as redeeming investments during market corrections after reading alarming headlines like "Rs 5 lakh crore of investor wealth wiped out." 

At other times, he paused his SIPs instead of capitalizing on lower NAVs or invested heavily during market peaks driven by a buying frenzy.

This behavior isn't unique to him. 

This discrepancy-caused by poor timing and 

emotional reactions-is where financial advisors can deliver true value.

     Courtesy :: Mr Ganesh Mohan , CEO, 

                          BAJAJ FINSERVE AMC 

Wealth creation for children*

*Wealth creation for children*

It is a topic of increasing interest among parents and financial advisors.

It has two parts , one is investing by you as a parent regularly to make their dreams come true. 

And the second is inculcating the habit of saving, and investing at their young age. 

One takes care of their financial well being at a later stage which you are doing at present. 

Another one takes care of their Habits cultivated early for their  well being when they grow older. 

Here's a breakdown of key strategies and considerations:

Early Savings and Habits. 

  *Start Early:* 

The power of compound interest is significant. Even small, regular contributions can grow substantially over time.

 *Savings Accounts* : 

A good starting point for young children. Open a Bank Account in the name of your minor children and inculcate them a good habit of Savings. 

  *Age-Based Savings Accounts:* 

Consider accounts with features that adjust investment risk as the child ages 

 *Teaching Financial Literacy:* 

 *Practical Lessons* : Involve children in budgeting, saving for goals, and understanding the value of money.

 *Age-Appropriate Discussions* : 

Tailor conversations to their understanding.

 *Role Modeling:* 

Children learn by observing. Demonstrate responsible financial habits.

 *Investing* :

============

 *Long-Term Perspective:* Investing for children is typically a long-term endeavor, allowing for greater risk tolerance.

  *Diversification* : 

Spread investments across different asset classes (stocks, bonds, real estate) to manage risk.

 *Consider a Custodial Account* : 

Allows parents to invest on a child's behalf, with the child gaining control at a specified age.

 *Entrepreneurship* :

 *Encourage Creativity* : Support their ideas and help them explore business concepts.

 **Teach Problem-Solving:* Emphasize identifying needs and developing solutions.

  *Start Small* : 

Encourage them to plan to save for a predicted future expenses however small it is .  Like buying their most liked toys only after saving in small amounts every day/week /month. 

 *Key Considerations:* 

 *Child's Age and Maturity* : Tailor strategies to their developmental stage.

  *Goals* : Are you saving for college, a down payment, or general financial security?

  *Risk Tolerance* : Understand your and your child's comfort level with investment risk.

 *Professional Advice:* Consult your trusted financial advisor for personalized guidance.

Consult your Trusted Mutual Fund Distributor Sridhar Rajasekar S -Shree Investments.

     Credit :-   Inputs from various articles published already by some authors.

Money Mistakes

Avoid these money mistakes:

1️⃣ *Worrying Only About Bills:*

 If you focus only on expenses, you might miss out on ways to grow your money.  

2️⃣ *Saving Too Much and Not Investing:* Relying only on savings can let inflation eat away at your money’s value. Invest to make it work for you!  

,3️⃣ *Spending for Quick Happiness:* Buying things for instant joy might feel good now, but it can hurt your finances in the long run.  

4️⃣ *Thinking You Know It All:* Being too confident about your money skills can lead to mistakes that cost you.  

5️⃣ *Spending More with Every Raise:* Upgrading your lifestyle every time you earn more makes it harder to save and build wealth.  

 **Change your money mindset, and you can change your future!* 

* 

What’s your main reason to save right now?  

- Emergency fund safety  

* Education for children  

* Saving for a wedding or family wedding  

* Buying a car or home  

* Starting a business  

 *Now that you’ve picked your goal, take action* 

— *start Investing* 

Consult your  *Trusted Mutual fund Distributor* 

SRIDHAR RAJASEKAR S 

-SHREE INVESTMENTS

ADVICE TO FIRST TIME INVESTORS

Why conservative hybrid funds are suitable for first time or risk averse investors? 

Simple asset allocation maths will demonstrate why conservative hybrid funds are suitable for first time investors.

 Let us assume that a conservative hybrid fund has 80% allocation to debt and 20% allocation to equity. 

 Let us assume the debt as an asset class gives 7% annualized return. 

 So in a year, the debt portion of the fund will contribute 5.6% to the fund’s returns. 

 If the equity return is 15% in a year, then the equity portion will contribute 3% to the fund’s returns. 

 So the overall return will be 8.6%. 

 Let us now assume that in the next year, equity market fell by 20%. 

 In that year, the return of the equity portion of the fund will be -4%, but the return of the debt portion will be 5.6%. 

 So the return of the hypothetical conservative hybrid fund will be 1.6% (5.6% - 4%) i.e. the return is still positive despite the large correction in equities. 

 You can see that conservative hybrid funds can limit downside risk of investors in bear markets. 

 Stability is a very important factor in investor experience because behavioural biases in the extreme volatility can lead the investor to make decisions, which harm their long term financial interests.

 Over sufficiently long investment tenures, conservative hybrid funds have the potential of generating inflation beating returns. 

  One such example is SBI Conservative Hybrid Fund. 

 SBI Conservative Hybrid Fund has a track record of more than 23 years with an AUM base of more than Rs 10,000 crores as on 31st August 2024 (source: SBIMF Fund Factsheet). 

 The fund has outperformed its benchmark index (Nifty 50 Hybrid Composite Debt 15:85 Index) over different investment periods.

Who should invest in SBI Conservative Hybrid Fund? 

1. Investors who want to get higher returns than traditional fixed income investments without taking high risks. 

 2. Investors with moderate to moderately high risk appetites. 

 3. First time investors can invest in this fund with long investment horizon. 

 4. Investors who have at least 3 – 5 years investment horizon. 

 5. Investors should consult with their financial advisors or mutual fund distributors before investing in SBI Conservative Hybrid Fund. 

 Mutual Fund Investments are subject to market risk, read all scheme related documents carefully

How to benefit from SIP Mutual funds

There are two main benefits that you can immediately see when you invest through *SIP Mutual Funds*

Your money is being managed "*Professionally*" which is a relief for many and you have made an investment which instantly "*Diversifies*" your portfolio.

*In spite of having those benefits, not everyone becomes wealthy by investing through SIP Mutual Funds*.

Mostly they took investment decisions on their own , and redeemed the investment amount on their own due to their personal financial Behaviour their by loosing the opportunity to create wealth . 

For example, many investors panic when the markets fluctuate and exit early before the term of their investments reach their goal.

If you want to build wealth through SIP Mutual Funds, you need to have a plan tagged with your investment and develop some "good habits".

Here are some of the habits.

*Identify a Your personal Mutual fund distributior 

He will guide to avoid loss due to behavioural decision as below* ::-

* Start early and invest consistently

* Tag your SIP Mutual Funds investments to a long or short-term goal.

* Diversify your SIP Mutual Fund investments.

* Don't panic during market fluctuating time, just keep calm and stay invested.

* Assess your current level of risk tolerance before investing in a SIP Mutual Funds.

To be able to reap benefits of SIP Mutual Funds when markets do recover, it is important to remain invested patiently during market correction.