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hi I'm vertical even Cal and these are
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15 of the most common in mr. mistakes
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that I have observed I have been talking
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about personal finance on stage for the
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last five years I just realized it and I
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thought I'll compile a list of some of
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the most common mistakes that I notice
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of course I'm not a big fan of
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behavioral finance per se because I tend
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to have a view that Who am I to talk
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about other people's money management
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Who am I to say XO why trade is a
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mistake but I also believe that those
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who talk about behavioral finance also
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have behavioral drains which have to be
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decisive about but still some I mean
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there are some attitude some notions
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some Beebe's which in my opinion are not
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productive and it is in that sense I
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think of them as a mistake you can argue
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that it's what I think is wrong of
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course but in in some of these instances
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I have shown with data that the believes
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are wrong and I will try to include the
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proof in the what they call the I button
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yeah so there every can
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so let's get started so the first I mean
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I'm not average them I mean I'm not
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numbers are not not linked them in any
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order I just thought about it and just
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put in door slides so the first idea
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that many vistas have they have a rough
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idea of averaging that is they they buy
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more of the same thing that assume it's
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better they buy three large large cap
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fund three multi-cat funds and they'll
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have they'll buy 50/50 then one mighty
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cap then one by aggressive balance to
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they're essentially buying more of the
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same thing and they think it's averaging
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and it will it will reduce risk our
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product on downsides not if you buy
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not the same thing it'll never help you
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in this quarter you have to buy
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averaging or diversification you should
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buy apples oranges and tomatoes if you
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keep buying more and more awareness of
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different types of oranges you will just
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end up getting you know pretty much
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similar results to having just one of
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them so that's one common mistake I see
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they in the name of diversification and
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asset allocation they just buy more of
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the same thing and that's from Petey
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waiting for a suitable time to invest
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this waiting waiting for a suitable time
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to invest is okay but the problem is
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that many people don't have a method
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they just ask people can I use now
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should I wait for the market to kudo the
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market is at an all-time high
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I just talked about two to three days
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ago absolutely wait until Direction's
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are worth why why should you wait what
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logic is that the day after you invested
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the market crashes what we do
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this is absolutely no logic is there are
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people who are methods they will they
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will have friends they will look at the
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nifty PE they for wait for it to reach a
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certain level before they put in money
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or give you money they will have
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indicators like 200-day moving averages
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or whatever double moving averages
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whatever it is I have a valuation for me
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you can have it so people want a method
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and will not ask but and they're not
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going to do it but of course you should
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people if you also be if you also like
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those techniques if you stick to one of
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those methods otherwise to be a oh just
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wait for a suitable time you must either
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you have a method to manage risk or you
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keep on just keep investing
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systematically and do systematic risk
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management don't wait for the rate for a
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suitable time to invest I have showed
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you also I've shown in another video
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that are investing on dips alone will
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not like it so I mean this has no use
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that's made in that sense
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expecting a return for market limits
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rheumatism is a dramatic statement to
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make but this is wrong
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unfortunately this is true I mean you
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can't say I'm expecting 15 percent
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return from Sensex for next 20 years or
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reapers return from Indian stock markets
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overall and so on are from this mutual
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fund off from that region that doesn't
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work because the range of returns the
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the possible sprinting returns over 10
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years 15 years 20 years of the stock
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market is very very huge the only reason
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why you do not see such a range in the
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Indian stock market is because of less
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data I have just purchased sama S&P 500
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did they tie yesterday and I from 1927
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onwards and I have the Rolly returns
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data I'll show you
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30 years data I will still to actuate a
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lot and you do not beat inflation on so
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don't make such assumptions it's wrong
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and expect 10 percent 20 percent you
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will not get it the what is the
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alternative then the alternative is to
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not focus on returns is to focus on your
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corpus what is the carpus I need for my
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goal and keep an eye on that I've been
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telling this again and again in addition
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to rebalancing every year and so on or
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whether you want to tactical in addition
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to it whatever it is keep an eye on that
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corpus because that is your goal you are
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good you cannot eat with returns you
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need money to eat all you need money to
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send your kids to college you cannot
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send your kids to college with returns
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right so keep an eye on that gradually
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push money to save for assets and you
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don't worry about anything else on the
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paper it talks push it to say for assets
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then you will be then you can face any
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crisis I told you in my audits that what
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I have done is that I not have enough
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money my kid is only nine years old but
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I have enough money to send him to UT
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degree now so I can handle a market
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crash today which I was still not my
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goal will not be affected of course I
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need be emotionally affected all that
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will happen but my goal will haunt you
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so that is the way to manage this son
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that is what you should do do not expect
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the returns from investments marketing
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that you can really expect
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it's overconfidence based on past data
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people say a stock market Indian stock
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market has always given 15% always given
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10% this you know itself this is wrong
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if you actually look at rolling Ritter
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this is not true and I have seen people
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and awesome ideas of wealth Facebook
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group say last three years ago liquid
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parts of get 9% returns it's justice
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that's because it was sort of even that
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occurred that gave you that that doesn't
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mean when you started missing you will
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get 90% returns in Utah have you got 90%
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returns in the last three years in
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liquid funds no the same people who
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claim that I'm not guarded
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this is stupidity just look at last few
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years later and say recency bias right
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that's completely wrong don't do that
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oh my god this is so annoying feeling
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that mean to know more about every new
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product I my inbox is filled with means
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have you this nfo have you seen this in
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what for okay though I benefit from
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reviewing every enough oh because people
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will read it people will view it I will
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get my money out of it that's the only
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use what is the use for you most of the
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people who are interested in levels will
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probably not even vest in it or they
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leave a small amount doing it for more
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what use is it for don't waste your time
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learning about every new product in town
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small K is alpha I say P Vita I said we
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look the I mean the guys who talk about
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these are played basically sales guys we
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Dana cannot be strictly sales guys they
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may be they are part of the company so
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there they obviously have a conflict of
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interest and then we'll paint people
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rosy picture either you should know how
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to you should spend your time and
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analyze the data otherwise don't bother
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you're not going to miss out everything
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will just be about not knowing you're
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wasting your time go get yourself a new
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hobby it's a complete waste of my
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suppose that's what is keeping people
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like me I like appealing after open the
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blogging business I have to write
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something the Center for that can fo be
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suffering from small exposure syndrome I
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have separate video for this this is
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not focusing on the big picture and
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saying you get 50,000 packs saving
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advantage from NTS why would one every
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years because the truth is are you
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actually investing you probably need to
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invest three or four and more than that
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for your retirement are you actually
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investing that way if that is right then
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you not worry about these 50,000 tax
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changes psychological lineal benefits
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Lou and having say I will have small
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exposure of international stocks I will
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have small explosion I see series coming
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with a new mmmm sick fun I will have fun
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I will take 5% exposure to it I will
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take 5% exposure to use t next 50
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because everybody is talking about it
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this is this stupidity will not thank
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you sorry
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it's unproductive it not make any
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difference now judging mistake whoops so
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not having yardsticks from judging big
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or small what is what is the how you
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determine what what is with respect to
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what and what is a lump sum with respect
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to what I mean have suffer if I have 100
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lakhs in the market if I am they receive
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5 lakhs that's not a lump sum for me I
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just put it in the market that's it
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that's not a lump sum phone if my salary
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is 3 lakhs a month under this a 1 life
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that's not a so middle and I will be
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interesting I hope I am investing 1 and
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half lakhs among the blacks every month
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so you should have a yardstick for
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everything before you judge there's
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nothing big or small as absolute
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big with respect to what small with
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respect to what that with respect to
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what is missing in the case of most
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investors they don't have a yardstick at
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all you should have a yardstick for
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returns you should have a yardstick for
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risk for example somebody told me I was
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a commenter and it seemed that article
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do there's a value research have have
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shown that all mutual fund SATs 7 years
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and above have never given negative
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returns so if I
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in us in a mutual fund s IP for seven
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years I invested it for 17 years and I
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find that my return is 2% I will be
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happy I have taken so much risk to my
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university in an equal TSI be fine for
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equity say and I get a return of just
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one or two percent that's not negative
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so it that that doesn't mean I've not
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made a loss of course I've made a loss
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because the real return is it over the
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inflation is so much higher so please
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have the yardstick for judging big small
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good bad or giving whatever it is so
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other unless you have the yardstick you
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cannot make judgments this is a big one
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people ask you oh I have to talk my
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investments I have to consolidate all my
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investments
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I want a portal where I can consolidate
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everything oh god six
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leave your money alone wanna know who is
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the biggest enemy for your money who is
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stopping you from becoming rich go look
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in the mirror it's you stop looking at
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your investments look at your
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investments one is a year you don't need
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a nap for all that you don't even need
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an excel sheet
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you should wad I would suggest you
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create an excel sheet let's say every
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December or every let's say June
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whatever it is after year you all look
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at it review it takes will she do it
00:12:18
again next your money maybe say if you
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will be fine don't track your
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investments watched kittens don't boy
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you just keep worrying about
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advertisements and do something wrong
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don't don't just don't
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it is completely unproductive some
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people say I watch every day but I don't
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do anything why are you watching them go
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get a life man Oh
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assuming information is power
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I've talked about information try it
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again and again and again stop thinking
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that you have to knowable what that guy
00:12:55
has written what this guy has written
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what what they are saying about this
00:13:00
product that product no information is
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not power information is confusion
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information decision stay
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knowledge is power and knowledge is lack
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of information
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don't-don't-don't I have told it I've
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said this many times or in the video as
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well and say it again stop watching my
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channel if your money or management is
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in place so other URL to share the
00:13:26
videos to your friends who who you think
00:13:28
need some help you graduate more way no
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point
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watching I'm saying the same garbage
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again and again ray have you not noticed
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if you have not noticed a pattern in
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what I am saying if you think you have
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learned from my channel or if you think
00:13:48
what I'm turning out every day is useful
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then you must notice a pattern in my
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savings you if you do not notice a
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pattern and something is wrong
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stop stop watching if you have noticed a
00:14:02
pattern stop watch then also stopped
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watching because you are you have an
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inert I am no longer useful that's the
00:14:08
point get that pattern once you get the
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pattern or do something else don't think
00:14:13
about money and this is a common mistake
00:14:16
assuming more risk is more returns are
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you I am yeah I will I will invest in
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small caps more of sno-caps more of
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Metcalf's
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I don't want large caps large gaps I
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will new to large caps manage become 30
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or 40 years old years worldwide this is
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just garbage this is absolutely wrong
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I've shown this is not true it doesn't
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work you must have but diversify what
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for you with proper risk management at
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all times whatever your age and most
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people don't know and another mistake
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which is very rigid to do this I have
00:14:51
not actually written it down explicitly
00:14:52
is I have largely skeptical you don't
00:14:56
know anything about your cabinet unless
00:14:58
and until your software crash most
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people who are if you are investing in
00:15:02
the capital markets today I have not
00:15:04
seen anything any big losses and some
00:15:08
people say
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equity market will be volatile in the
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short term only you got long term things
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will be okay how is it possible the
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short term losses or gains concatenate
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create the loss of the game everything
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matters sequence of returns matter if
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you do not understand sequence of return
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you will never manage the risk I have a
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video on that maybe a couple of videos
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and that means because this is an
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extremely important animal returns how
00:15:41
these annual returns stack up they
00:15:43
determine what happens to your final
00:15:46
results and this is another problem
00:15:50
locking up money is good to waste if you
00:15:53
can spend knocking is good NPS locking
00:15:56
is good VP of lock-in is good doesn't
00:15:58
have much of a lot people a relatively
00:16:01
heal this was knocking is good Ives
00:16:03
I heard all sort of nonsense this is not
00:16:06
a liquidity when you what are the
00:16:09
aspects of an investment that will take
00:16:11
care of four of them risk return
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liquidity taxation and expenses these
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are the four pillars of an impersonal
00:16:21
they have to be favorable in certain
00:16:27
cases yes a locking is inevitable
00:16:30
unavoidable mandatory then you work the
00:16:33
homes and make sure you have enough
00:16:35
money elsewhere so you make up for it
00:16:37
that's okay but these are the four
00:16:39
pillars of investor you have to consider
00:16:43
all of them at least be aware of them
00:16:45
and take action corrective action
00:16:48
elsewhere if you cannot work the wrong
00:16:50
otherwise it's a common are shooting
00:16:53
investing in stocks is better than you
00:16:54
German this is another common beginner
00:16:56
mistake see it is possible for a direct
00:16:59
stock investor to be the mutual fund
00:17:01
manager it is definitely possible but do
00:17:04
not confuse possibility and probability
00:17:09
possibility is zero and one
00:17:12
it's binary possible or not possible
00:17:15
that's all probability is zero to one
00:17:18
anything between 0 to 1 this problem you
00:17:21
do not know the probability there's no
00:17:23
you cannot judge
00:17:26
the different possibility called
00:17:28
possible data canisters performance and
00:17:31
compare it with one - that's not
00:17:32
possible
00:17:33
yes sir so you cannot talk about
00:17:36
probability all you can do is you say
00:17:39
it's possible yes it's possible to be
00:17:41
but then you start investing direct
00:17:45
equity will you beat fund managers
00:17:47
nobody can say and this is another
00:17:52
problem I want to I want to move by the
00:17:56
fund manager as increased allocation
00:17:57
cash why as they might have they bought
00:18:00
this stock why have they sold this stock
00:18:03
you can sit and talk about it for hours
00:18:05
and hours and hours you never understand
00:18:07
it unless and until you are invited to
00:18:09
their fund management meeting table and
00:18:12
you will never be invited even if you
00:18:14
are invited to the meetings they will
00:18:15
never tell you the real reason do not
00:18:18
back try to backseat Drive your mutual
00:18:20
funds outsource money management do
00:18:23
something else look at it from time to
00:18:25
time but tune back see me regularly
00:18:28
funny
00:18:30
market timing there are two there are
00:18:31
two incorrect assumptions market timing
00:18:33
is not possible that is the incorrect
00:18:35
assumption this is a this is the problem
00:18:37
that has been this is a missile in by
00:18:39
the financial services industry because
00:18:41
they're worried that commissions will be
00:18:42
lost on their profits will be affected
00:18:44
market timing and the other wrong
00:18:46
mistake is that market timing extreme
00:18:48
people who packed the markets they say
00:18:50
that they want to time the market to get
00:18:52
more returns both of them are missed are
00:18:54
wrong market timing is definitely
00:18:57
possible and market timing has got very
00:19:02
high probability of lowering investment
00:19:05
risk and just about the coin toss
00:19:08
probability 50% this way or that way
00:19:11
coin toss probability of enhancing
00:19:14
returns it has got more than 50 percent
00:19:16
probability of lowering risk and it has
00:19:22
got just about borderline probability of
00:19:25
enhancing return sometimes risk will be
00:19:28
sorry this will more often than not be
00:19:31
lower but along with that sometimes
00:19:33
returns will be high sometimes returns
00:19:36
will be low
00:19:37
and another common mistake is related to
00:19:40
the Dolph is a peaking people who say I
00:19:42
have got alpha arse higher alpha does
00:19:45
not mean higher returns don't confuse
00:19:47
your another higher alpha means for a
00:19:49
particular level of risk the return is
00:19:51
justifiable and that's what alpha
00:19:53
essentially means after I have respected
00:19:55
video on this do not get country do not
00:19:57
confuse alpha and higher returns that's
00:19:59
another mistake as I'm just talking
00:20:03
about that so I can keep going there are
00:20:05
other mistakes please share in the
00:20:08
comments
00:20:08
I also Peace interview question is for
00:20:14
portfolio management for this week's Q&A
00:20:16
are like doing either tomorrow or Monday
00:20:18
and if you have any problems with this
00:20:20
video go ahead so thank you as always
00:20:23
for watching catch you later bye bye
