Right investments key to your wealth's immunity

The pandemic has impacted most of us directly or indirectly, especially during the second wave. We've scrambled our resources to get ourselves, our loved ones or known people to ensure get a treatment for the infection through whichever possible ways.

It's said that the only way to face this virus outbreak is through immunity. So, the best way now is to be inoculated with any of the available vaccines or the other extreme is through infection itself, a rather painful option.

The genesis of this article is a discussion with a friend about the lesson this episode has taught us on life and investing. Let's dwell a little further: How do we maintain good health; would that guarantee against contracting any diseases and ultimately dodging death? Let's investigate the aspects of what defines a good health. Most of the times, its relative. For instance, an elderly person of say age 70 taking care of his chores without any external support could be considered healthy in comparison to someone being monitored constantly.

Drawing parallel in investing, a good investment isn't always the one which provides with great returns but the one which helps one achieve the defined goals or objectives. So, for someone looking at preserving the capital in a falling interest rate scenario manages to beat a bank return then the vehicle chosen is certainly a good one.

What else constitutes a sound health. A decent appetite, good digestion, receptive motor & sensory system and free of any dis-eases. As the age progresses, very few people manage to maintain the above qualities either due to wear & tear or due to accumulated bad actions (chronic issues). The only insurance is the consistent habits with regularity, moderation and discipline in all aspects of the life.

Likewise in investing, once a goal is defined, one needs to have a decent asset allocation with a desired level of diversification that suits the risk tolerance. Also, the prominent factor that governs the success is to derive a philosophy or style of investing, the discipline to stick to it while remaining open to adjust the portfolio for any change in externalities. Another important factor is the desire to over-concentrate and exercise moderation i.e., diversification along with systematic investing.

We've been hearing about immunity enhancers by taking certain foods or drugs (supplements) to fight against the virus. It could possibly work now but for long term benefits, the earlier mentioned behavior is mandatory. Also, in the rush to safeguard ourselves, we may attempt to consume unconventional food or drug to achieve the goal. Such situations could be avoided if we adhere a balanced diet, physical exercise and mental upkeep. The bing, abstain, bing, abstain regime would do more harm than good.

Coincidentally, in investing, we might be tempted to participate in a rally where we understand less about aninvestment. These moves must be calculated with a portion of the 'mad' money be contributed i.e., a portion of which one would find comfort to speculate than inculcating that into the original plan. Any speculation or trading in an asset or investment could have mixed results or even unproven outcomes. Such moves could be avoided by following a well-intended plan with actionable items and points for revision. This is where a systematic investing helps makes us more disciplined and coherent.

And with the advent of social media, we find so many remedies (of multiple practicians) for the recovery from the infection or avoiding the infection. How or Who do we trust? It's very difficult to judge particularly when we turn emotional about the wellbeing of ourself or our known members. This is where we need to exercise caution and check for the credentials. This is same even in investing where 60-sec slick video boasts about raking gains but with no accountability over the outcomes.

At these uncertain times, we prefer to have a qualified or knowledgeable professional (ideally a physician or a doctor) for assistance. We could reach them for any help regarding our health or changes in the conditions so that we're well directed to overcome these testing times. Equally, while investing it does great for an individual to seek help of a professional or advisor who would be able to guide in times of market turmoil or otherwise from our goal perspective. So, investor immunity is achieved by not accessing more info but by cutting the noise and adhering to the discipline.

(The author is a co-founder of "Wealocity", a wealth management firm and could be reached at knk@wealocity.com)