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By:

Kaustubh Kale

10 September 2024 at 6:07:15 pm

Four Methods to Choose Investment

One of the most common questions investors ask is: “Which investment should I choose?” The real answer is that no investment is good or bad in isolation. A simple way to judge any investment is the RRLT framework - Risk, Return, Liquidity and Time Period. Before investing in any product, all four factors should be seen together. 1. Return Return is the reward you expect from the investment. It may come in the form of interest, dividend, capital appreciation or regular income. Naturally, every...

Four Methods to Choose Investment

One of the most common questions investors ask is: “Which investment should I choose?” The real answer is that no investment is good or bad in isolation. A simple way to judge any investment is the RRLT framework - Risk, Return, Liquidity and Time Period. Before investing in any product, all four factors should be seen together. 1. Return Return is the reward you expect from the investment. It may come in the form of interest, dividend, capital appreciation or regular income. Naturally, every investor wants good returns. However, return should be understood properly. It is important to look at the real intrinsic / internal rate of return (IRR) of every investment, especially when cash flows happen at different points of time. A product may sound attractive on the surface, but the actual return may be very different when calculated correctly. 2. Risk Risk is the possibility of losing money whether partially, fully, temporarily or permanently. In some investments, the risk is very low. In others, the value may fluctuate significantly in the short term. Direct stocks, equity mutual funds, gold and real estate can create wealth over time, but they need patience and the ability to tolerate ups and downs. On the other hand, fixed income products may offer stability, but they may not beat inflation over the long term. 3. Liquidity Liquidity means how easily you can convert your investment back into money when required. A savings account is highly liquid. Fixed deposits, mutual funds and stocks are reasonably liquid. Real estate may take time to sell. Liquidity matters because emergencies do not come with advance notice. Before chasing returns, every investor must ensure that enough money is available in liquid instruments for short-term needs and emergencies. 4. Time Period Time Period is the most important filter. The investment product should be selected based on when you need the money. If the money is needed within a few months or one to two years, safety and liquidity matter more than high returns. If the goal is ten, fifteen or twenty years away, growth-oriented assets like equity mutual funds, direct stocks and gold-related instruments can play a larger role. The longer the time horizon, the better your ability to handle short-term volatility. Goal-Based Planning This is where proper financial planning becomes useful. Make a table of your financial goals - home purchase, car, vacation, child education, child’s marriage and retirement. Write the amount required, adjust it for inflation and mention the time left for each goal. Once this is clear, choosing the right investment becomes easier. Investment Avenues Broadly, investment avenues can be divided into two categories - those that help beat inflation and those that mainly provide stability. Equities, equity mutual funds, gold and real estate help in long-term wealth creation by beating inflation. Your long-term financial goals should ideally be invested in this bucket - the one that helps your money grow faster than inflation. For your short-term goals, rely more on bank fixed deposits, recurring deposits, and debt mutual funds. Here, safety and availability of money are more important than high returns. A good investment is not the one that sounds exciting. A good investment is the one that fits your goal. So before investing anywhere, remember RRLT - Risk, Return, Liquidity and Time Period. When these four are aligned with your financial goal, investment decisions become much clearer. (The writer is Chartered Accountant and CFA (USA). Financial advisor. Views personal. He could be reached on 9833133605)

Influencer Idiocy

The arrest of Haryana-based YouTuber Jyoti Malhotra for dallying with Pakistani intelligence operatives is much more than a serious embarrassment against the backdrop of a full-blown India-Pakistan crisis. Better known for her chirpy travel reels than for sound judgment, Malhotra’s arrest is a window into the astonishing naiveté and wilful recklessness of a new tribe of digital ‘influencers’ who flirt with national security like it’s just another clickbait opportunity. Her case is an ignoble cautionary tale in a time when soft power, disinformation and psychological warfare are just as potent as drones and missiles being hurled across the border by our hostile neighbour.


Malhotra, whose claim to fame was wandering around exotic locales and vlogging about them for her audience, has been arrested under the Official Secrets Act and sections of the Bharatiya Nyaya Sanhita for consorting with Pakistani intelligence operatives. Her multiple visits to Pakistan and her presence at iftar dinners hosted by known PIOs (Pakistani Intelligence Officers) were not coincidences, if the police are to be believed.


The Indian police say she was being developed as an asset. Her financial records reportedly show travel far beyond her means, and her communications with Pakistani agents continued even during periods of heightened military tension between India and Pakistan. For a civilian vlogger with no access to classified information, this may seem trivial. It is not. Modern espionage speaks in hashtags and plays the fool on camera. That makes it all the more dangerous.


Let us dispense with the idea that Malhotra is a naïve dupe. Her repeated meetings with figures like Ehsan-ur-Rahim (alias Danish) of the Pakistan High Commission, her trips to Pakistan arranged by his contacts, and her continued contact even after terror attacks in Pahalgam, suggest more than innocent wanderlust. She was, knowingly or otherwise, amplifying the reach of a state known for subverting Indian interests.


This is not an isolated case. Just days earlier, another arrest was made in Uttar Pradesh of Shahzad, a trader-turned-ISI asset who smuggled goods across the border while feeding sensitive data to Pakistan. Like Malhotra, he travelled to Pakistan multiple times. Like her, his economic activity was disproportionate to his means. And like her, he used this dissonance to cloak intelligence work in the ordinary garb of cross-border trade or cultural tourism.


What unites these cases is a cocktail of ego, greed and stupidity. YouTubers, Instagrammers, and TikTok stars often see themselves as global citizens above politics and patriotism. Some fall into the trap of thinking that statecraft is a game for someone else to worry about while they collect likes and visa stamps. But the enemy is not playing games. Pakistan’s ISI and China’s MSS are deadly serious about using online influencers as conduits for soft-power manipulation. They seek to plant seeds of influence and disaffection where they can. The public must learn to stop romanticising influencers who gallivant to rogue states and return draped in the fig leaves of peace and pluralism.

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