As we approach 2020, as an investor there are a lot of 'ifs and buts' we carry forward from 2019. I look at them as learnings! An eventful year on economic, political and social fronts have taught us some important lessons and I am sure as a learner or investors we would not repeat those mistakes and hence I say “5 things you need not worry about 2020!”

1)Timing the Market: Take an example of large caps in 2017 or mid & small caps in 2018, investors made a simple mistake of chasing the performance and redeeming from the respective asset classes in the subsequent year at the wrong time; result- under performing portfolios. I am sure 2019 taught us 'time in the market is far more critical than timing the market'.

2)Herd Mentality:Overexposing ourselves to the latest fad is one of the most favorite of mistakes investors make during all market cycles. But do they consider their risk profile before doing that? Do they keep in mind the investment objective before moulding their portfolios? Seldom is the answer yes but in most cases, it is not. 2019 taught us the importance of asset allocation. The lesson learned we need not worry about in 2020!

3)Prudent Financial Planning: Often I have seen investors over-leveraging in bull run and taking the adverse impacts during periods like 2019 where the scenario demands managing your expenses in order to pay EMIs. An economic scenario in 2019 helped us understand the same and in the New Year yes, we will balance it out.

4)Acting on Your Impulse:Often we discard an asset class over its performance and then the cycle turns. What are we missing out in this? Some really good investment opportunities! 2019 was not that good year for equity but the valuations were attractive for quality investments. 2020 as a year will be calmer as we will refrain from taking any impulse actions on our portfolio.

5)Liquidity Management: Do we plan for some unforeseen events where we are exposed to a situation of raising immediate funds or cash for any unfortunate event in the family? 2019 was full of such events and it tasted the patience of every investor. Wouldn’t it be wise to prepare your financial plan in a way that it has a certain allocation to arbitrage or ultra short term funds to help us in difficult times?

With learnings from 2019, I will be more disciplined thereby becoming a Stress-free investor.

Happy New Year!

- Virendra Somwanshi

MD & CEO, MOPWM