My asset allocation has changed from a 100 per cent equity portfolio to a more balanced portfolio.PRATEEK PANT, DIRECTOR, PRODUCTS AND SERVICES, RBS PRIVATE BANKING
“The ease of investing and simplicity of the instrument would be key to making an investment,” says Prateek Pant, Director – Products and Services, RBS Private Banking. He shares with Business Line his views on investing. Excerpts:
How do you differentiate between the goals and investment requirements of each member of your family?
My immediate family members include my mother, who is a retired school teacher, my wife who is a successful working professional and my nine-year-old daughter.
The main investment goal for my mother is to generate sufficient monthly income from her retirement corpus to meet her ongoing expenses, and to occasionally provide for some indulgences.
My wife and I pool our resources to plan for our retirement corpus, as well as to meet the future education requirements of our daughter. We have also planned for sufficient liquidity in the portfolio to meet our future lifestyle needs or in the event of any unforeseen emergencies.
What do you look for most when making an investment?
Personally, the ease of investing and the simplicity of the instrument would be key to making an investment. The key variables would be risk, time period and liquidity in targeting a certain return on investment.
For example, if I were planning an investment for my daughter's future education, I would look to invest in the 10-year systematic investment plan (SIP) of a large capitalised equity fund and supplement this investment with a term insurance for protection. As another example, for shorter term lifestyle goals, I would tend to park my money in short or medium term debt funds.
How much money do you set aside for investments?
At this stage of life, with my primary residence requirement already taken care of, I would allocate about 40 per cent of my disposable income towards investments.
What was your first investment?
My first real investment (aside from speculation while I was still in college) was buying an apartment in Bangalore. My wife and I saw more than 250 houses for over a year before we decided on that place - we liked the neighbourhood, the layout of the apartment and the residential complex, and so zeroed in on it.
How has your allocation to different asset classes changed over the years?
My asset allocation has changed from a 100 per equity portfolio to a more balanced portfolio - my investment approach tends to be more long term strategic now, rather than short term trading.
What have been your best and worst investments? Any lessons learnt?
As an engineering student in early the 1990s, I used to make regular visits to Dalal Street. I lost money on all investments then! After college, I started investing in SIPs in some larger capitalised equity funds and have continued to do the same till date.
Over more than a decade later, these investments have given me approximately 20 per cent annualised returns. As Sir John Templeton said “there are no free lunches”. If something appears too good to be true then it may actually not be true. Building long term wealth requires discipline and patience.
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