Satyameva Jayate in Financial services..

I do not have any intention to copy Amir’s concept neither I can. He is great and perfectionist in his field. However, I am inspired by his recent episode on Doctors. I wish he covered “Bankers” in coming episode.

In last one month, I received call from three of my clients.

1) Merchant Navy by profession– Being NRI, I suggested him to place NRE FD in the bank as the rates are very good but Relationship Manager advised him to invest into Highest NAV Guaranteed Insurance Product.

2) Director at Software Company – Emotionally tried to convince him to invest Rs 2 L each in his two Kid’s name as he was given a locker though he is the most profitable client to the bank.

3) CEO of the Private Company – Approached by the MNC Bank for Insurance under the wealth management and excellent follow up to get his green signal.

There are many more cases .Recently, A Celebrity ,Suchitra Krishnamoorthi also faced the same thing rather worst in her case.

Please read the article published in May 17, 2012 issue of Money life magazine by Ravi Subramanian, A banker turned Author. He describes “Bankers” as “Bhayankar”.

http://www.moneylife.in/article/mis-selling-bankers-dozen/25594.html

I would  like to receive your comments on it if you wish to share any.

Do investors really follow the rule of Equity Investment ?????

The Greatest of all Investor Gurus Benjamin Graham , John Templeton ,Warren Buffett says” Buy Low and Sell high” . Everyone suggests the same and that is what everyone would like to do.

But , are the investors following this principle ?

Please have a look at below link .

Annual Net sales of Equity MFs across different phases of the market

This shows totally reverse behaviour of Investors .

It is like buy high, buy more higher, buy even more even higher, buy less when market falls, buy lesser if markets fall more and buy nothing when markets are really down.

Similar thing is happening with Gold now .

Our net gold import stood at 0.4 % of the GDP in 2008 when the gold price was Rs 12,500/- ( per 10 grams ) and today it has gone up to 2 % of the GDP when the gold price is hovering at 29,000 /- .

Similar trend is observed withing the fund category . IT sector funds were getting sold like a hot cake in 2000 , then Infrastracture specific funds in 2007  , MIPs in 2009 and gold funds in last one year . And then the investors face disappointing results.

Mr. Prashant Jain , CIO of HDFC MF recently said in Business Line newspaper ,”Good returns are seldom made on investments made in good times.Rather, good returns are typically made on investments made in adverse times”.