One should properly diversify the portfolio, but over or under-diversification will not work. Reasonable diversification is important, says Mukesh Kochar, National Head of Wealth, AUM Capital.
In an interview with MintGenie, Kochar said that investors must refrain from investing in a sole financial instrument or those of the same kind of instruments, as putting all eggs in one basket can be a risky move.
Edited Excerpts:
How do you advise new-age investors to plan and implement investment strategies?
Most of the new-age investors have not seen any downfall in the equity market. Investors who have come to the market post covid have enjoyed a rally in the market with low volatility. One must be aware that the bull and bear phases are synonymous with the market, and the bull market will not last forever. So first of all, allocate only long-term funds to the equity market and maintain proper asset allocation with goal-based investments.
One should properly diversify the portfolio, but over or under-diversification will not work. Reasonable diversification is important. Invest regularly and use any deep fall in the market to invest. One should not look to make quick money as this may be risky and capital may erode. Avoiding the noise of penny stock is very important. One should look at the broader picture over the long term while investing. These are a few things one can keep in mind.
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Portfolios often fall short of their investment goals. What should investors do then?
Investors generally invest more in a rising market and sell and remain sideways in a downward-trending market. Also, they start very late and expect extraordinary returns in a short period to make quick money. One should always invest more in a down market and wait patiently with regular investment to reap the benefits in a bull market. The longer the investment, the more the power of compounding works and hence higher the multiplication of money.
What are the most common mistakes that derail many people from meeting their financial objectives?
Even a trivial financial mistake can derail people from meeting their financial objectives. One such mistake is the absence of diversification in different asset classes. One should refrain from investing in a sole financial instrument or those of the same kind of instruments, as putting all eggs in one basket can be a risky move for any investor. Inadequate knowledge and disregard for prevailing market conditions is another mistake that can make investors inefficient in accomplishing their financial objectives.
Another mistake is not starting early investment in financial planning for retirement. To have financial security during retirement, one must start early. Creating PPF accounts and investments via SIPs is a great way to build a larger retirement corpus. These are some of the mistakes that can be rectified by investors to avoid facing a financial crisis in the long run.
What steps should people take to stay current on financial policies and tax regulations?
One should read financial newspapers in digital apps regularly. Since people are busy in their areas, financial advisors can be consulted for any such thing.
There is more focus on earnings than asset allocation. What is your take on the same?
Asset allocation is the base which has to be done prudently to get the desired result. Otherwise, overallocation or under-allocation is hazardous. This can be done based on tenure, expected risk-return, market conditions, opportunities, hedging, etc. Earning is the outcome of asset allocation. So asset allocation is a process and earning is the outcome. So, focus on the process rather than the outcome.
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Many youngsters are now playing a leading role in managing at least a part of the portfolio themselves. How do you envisage the future of wealth management in the long run?
Nowadays, most of the retail volumes are generated via online mobile applications, resulting in a significant amount of investment from young investors. Technological advancement has made it possible for people to conveniently invest in the stock market.
At the same time, Covid-19 has played a pivotal role in introducing these investors to the market. There had been a downturn in the stock market followed by a gradual rise, resulting in many investors earning money for the first time. It is also evident that youngsters are seizing the opportunities provided by the Indian market into early savings so that they can achieve their long-term goals through the capital market. As the Indian market continues to offer opportunities to the younger generation, this base will likely expand even further.
The future of the wealth management industry is coupled with human expertise and digital prowess. Post-COVID, the wealth management sector has witnessed a significant digital transformation. Wealth managers have seemingly boosted their efficiency by embracing a platform-oriented approach, giving personalised assistance, and customizing investment approaches to create a holistic approach to meeting the demands of individual clients. The inclusion of technology will propel the importance of data analysis while protecting the invaluable client-advisor connection.
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Baker McKenzie today announced that leading project finance lawyer Matthias Schemuth has joined the Firm’s Singapore office* as a Principal and Asia Pacific Co-Head of Projects in its Finance & Projects practice, alongside Partner Jon Ornolffson in Tokyo.
Matthias joins the Firm from DLA Piper, bringing more than 20 years of experience in the energy and infrastructure sectors across Asia Pacific. He advises sponsors, developers, commercial banks, multilateral lending agencies, and export credit agencies on the structuring and financing of large-scale projects. His practice also spans international banking, structured commodity and trade finance, with a strong focus on emerging markets. Matthias has been consistently recognised by Chambers Asia Pacific and Who’s Who Legal as a leading project finance practitioner.
James Huang, Managing Principal of Baker McKenzie Wong & Leow in Singapore, said: “We are excited to welcome Matthias to our team. His expertise and proven record in managing teams will be invaluable as we expand our regional and global finance offerings for clients.”
Emmanuel Hadjidakis, Asia Pacific Chair of Baker McKenzie’s Banking & Finance Practice, commented: “Asia Pacific is seeing strong momentum in infrastructure development, energy transition investments, and cross-border project financing, much of it centred in Singapore. Having Matthias on board will further enhance our ability to help clients seize opportunities in the region’s evolving energy and infrastructure markets.”
Steven Sieker, Baker McKenzie’s Asia Chief Executive, added: “Matthias’s appointment underscores Baker McKenzie’s continued commitment to investing in exceptional talent across key markets to support our clients in navigating today’s increasingly complex business and regulatory environment.”
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Matthias said: “I’m thrilled to join Baker McKenzie and contribute to its strong growth in Asia Pacific. The Firm’s global reach and local depth provide an unparalleled platform for delivering innovative projects and financing solutions to clients in this dynamic region.”
With more than 2,700 deal practitioners in more than 40 jurisdictions, Baker McKenzie is a transactional powerhouse. The Firm excels in complex, cross-border transactions; over 65% of our deals are multijurisdictional. The teams are a hybrid of ‘local’ and ‘global’, combining money-market sophistication with local excellence. The Firm’s Banking & Finance lawyers are ranked in more jurisdictions than any other firm by Chambers.
Matthias’s hire continues the expansion of Baker McKenzie’s global team. His joining follows the recent arrivals of Carole Turcotte in Toronto; Tom Oslovar in Palo Alto; Jenny Liu in New York and Palo Alto; Helen Johnson, Mark Thompson, Nick Benson, Kevin Heverin, James Wyatt and Michal Berkner in London; Jan Schubert in Frankfurt; Todd Beauchamp and Charles Weinstein in Washington DC; Dan Ouyang, Winfield Lau, and Ke (Ronnie) Li in Beijing, Shanghai, and Hong Kong; and Alexander Stathopoulos in Singapore.
*Baker McKenzie Wong & Leow is the member firm of Baker McKenzie in Singapore
The Federal Reserve gave investors an early Christmas present by lowering interest rates by 25 basis points (i.e., 0.25%) marking its third rate cut this year. In the past, a change like this in the “long end” of the interest rate yield curve has triggered a predictable, investable pattern. Typically, this pattern would be bearish for finance stocks, particularly banks—investors would buy bank stocks when rates rose and sell them as rates fell….
Dozens of protesters from the “Religious Zionist Reservists Forum” and the “Shared Service Forum” demonstrated Saturday evening outside the home of Finance Minister Bezalel Smotrich in Kedumim.
The protesters arrived with a direct and pointed message, centered on a symbolic “draft order,” calling on Smotrich to “enlist” on behalf of the State of Israel and oppose what they termed the “sham law” being advanced by MK Boaz Bismuth and the Knesset’s haredi parties.
Among the protesters in Kedumim were the parents of Sergeant First Class (res.) Amichai Oster, who fell in battle in Gaza. Amichai grew up in Karnei Shomron and studied at the Shavei Hevron yeshiva.
Protesters held signs reading: “Smotrich, enlist for us,” along with the symbolic “draft order,” calling on him to “enlist for the sake of the State’s security and to save the people’s army – stand against the bill proposed by Bismuth and the haredim!”
Parallel demonstrations were held outside the homes of MK Ohad Tal in Efrat and MK Michal Woldiger in Givat Shmuel.
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Representatives of the “Shared Service Forum” said: “We are members of the public that contributes the most, and we came here to say: Bezalel, without enlistment there will be no victory and no security. Do not abandon our values for the sake of the coalition. The exemption law is a strategic threat, and you bear the responsibility to stop it and lead a real, fair draft plan for a country in which we are all partners. It’s in your hands.”
