Mark Twain, “A year has 365 days but India has 366 Festivals”
Every celebration centers around the rituals of prayer, seeking blessings, exchanging gifts and goodwill, sharing, music, dance & feasting.
In essence, the festivals teach us to Celebrate Life. Any excuse to celebrate is good, because the nature of our spirit is celebration.
Holi teaches us to let our body, mind and the spirit rejoice and get lost in festivity.
This festival of colours also has some great financial lessons to offer for all investors.
1. Learn from your past bad experience & move on
Holi is celebrated on Phalgun Purnima, the Birthday of Manu and the start of the new Samvat. It is the time to make new starts. If you haven’t started your investment journey, so far, this is the right time to start.
The festival of Holi has one eternal message, let bygones be bygones, bury old hatchets and start anew in the spirit of Spring. Hence even if you have had some bad investment experience so far, learn from it, let bygones be bygones and move ahead and restart your investment journey in the appropriate asset class.
2. Triumph of Good over Evil
Holi is a festival which signifies the win of good over evil. The tradition of burning Holika signifies the burning of all that is bad, because only after that one can enjoy one’s life. Similarly, if you want to prosper in your life and accumulate a corpus sufficient enough to last you through your golden years, then only saving and investing your hard-earned money is not enough. You also need to get rid of the evil of debt as soon as possible. For, in the absence of a good debt-management strategy, the financial planning for your secured future can become very difficult.
3. Add the different colours of Diversification in your investment portfolio
Holi, the festival of colours also marks the onset of the colourful season of spring, hence celebrated with colours. The diversification of colours adds to the festive zeal and makes the celebration enjoyable. Similarly, in the investment space too; a balanced approach of optimally diversifying the asset classes in the investment portfolio could lead to higher yield and returns and diversify the risks involved.
This Holi, don’t just add colour to your life. Take a step ahead and add some vibrant colours to your financial portfolio.
If you want your investment portfolio to paint a happy picture, give it a good palate of colours (asset classes), each with their own distinct characteristics; Start with green, the colour of Debt in your portfolio for regular income and balancing.
Next add Red, symbolizing purity, the colour of Equity which will create wealth and provide growth to your portfolio and beat inflationary pressures.
Next add Yellow, the colour of Gold to bring stability and act as hedge against equity and the risk in your portfolio.
Finally,Add Purple To Your Portfolio, The Colour Of Real Estatewhich symbolises royalty or luxury, is what real estate adds to your portfolio.
Diversify your portfolio like a dash of different colours; Always diversify your portfolio across different asset classes. Diversification helps you reduce volatility and risks associated with investment.
4. Enjoy your investment journey like Holi
Holi is associated with Mal Utsav (smearing of Colours). Holi is about fun and frolic, about enjoying, about happiness and having fun with your family and friends.
Similarly Investing should also be fun and the journey, Enjoyable. Do not invest in instruments which you do not like or have no knowledge about and understand. At the end of the day, investing is all about long-term capital creation. It needs a lot of patience as well as confidence in your investments and you can only be patient with a process if you have complete conviction and you enjoy the journey.
Whatever you invest in, should give you happiness.
Characteristics of every investment instrument is important, your temperament and attitude towards risk is also equally important to determine the best composition of your portfolio. The celebration of the festival of Holi and your investments should finally result in happiness and enjoyment for all.
5. Play Safe
The zeal of this festival of colors prevails, if you play safe. Some people make use of hazardous colors while playing Holi. However, one should play with organic colors that will have the least ill effect on health. This way you can make the festival memorable as well.
In the same manner, you should opt for investment options that are most suitable for your risk profile and are based on your time horizon to the goal. This will help you optimize your risk and return.
Ideally the objective should be to invest in investment options which can handle volatility, give you downside protection and, post tax returns should beat inflation at the least.
The long-term investment in stocks, say for about 5 years and more tend to become a safe investment option. For a lesser period, you can opt for a mix of Debt and equity so as to optimize your returns.
You should consult your financial advisor who will be best suited to design a portfolio for you keeping all the factors in mind.
6. Review the Investments
While celebrating Holi and having fun, as the financial year is also coming to an end, it’s a good time to assess your financial goals properly and re-build the portfolio to fulfill those goals. Financial lessons learnt from this festival may help you build upon your returns.
At the festival of Holi, we look forward to sort out all grief and miseries with anyone. We gather with friends and family and celebrate this festival with love and laughter, revive bitter relations and build new relations as well.
Likewise, you should also check the performance of the stocks which were earlier not performing and assess if it makes sense to include in your investment portfolio. When it comes to reviewing the investment portfolio, you need to check the return of stocks you are investing in and ascertain whether your investments are providing a minimum rate of return you need every year. You only need to pick a right mix of investments and invest the amount needed to reach the target.
Prepare a list of all such things that you can do to clean your portfolio and think of certain practical ways to repay your high cost debt first. Cleaning your portfolio may be a bit difficult, but make a pledge to embark upon this path on this festival, to make yourself happy and tension free.
Since there is no better time of the year than this to celebrate colours in all their glory, we wish that Holi makes your portfolio bloom in the year ahead and brings you happiness year after year.
Do meet your financial advisor to review your financial goals and portfolio and plan the way ahead to achieve your goals.
Happy Holi!
Have a great one, celebrate with your family & friends in the right spirit.
Happy Investing!!
Stay Blessed Forever
Sandeep Sahni
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Note: All information provided in this blog is for educational purposes only. They don’t constitute any professional advise or service. Readers are requested to consult a financial advisor before investing as investments are subject to Market Risks.
