Modak and the Art of Investing

As the aroma of freshly steamed Modaks fills homes during Ganesh Utsav, the festive spirit comes alive instantly. My mouth is already watering at the thought! The humble Modak, prepared with love to honour Lord Ganesha, may look simple from the outside. But anyone who has tried making one knows that a good Modak depends on several things coming together - the right ingredients, the right recipe, patience with the process, and finally, enjoying the result. Investing is surprisingly similar....

min read

As the aroma of freshly steamed Modaks fills homes during Ganesh Utsav, the festive spirit comes alive instantly. My mouth is already watering at the thought! The humble Modak, prepared with love to honour Lord Ganesha, may look simple from the outside. But anyone who has tried making one knows that a good Modak depends on several things coming together - the right ingredients, the right recipe, patience with the process, and finally, enjoying the result. Investing is surprisingly similar. Choose the Right Ingredients A Modak is only as good as the ingredients that go into it. Fresh coconut, good-quality jaggery, properly prepared rice flour and the right flavours all contribute to the final result. Our investments and financial products are the ingredients of our financial plan. Equities, mutual funds, fixed income, gold and other investments each have a specific role to play. The objective is not to pick whatever appears most exciting at the moment, but to select suitable, good-quality investments that match our financial goals, time horizon and ability to take risks. Health and life insurance are equally important ingredients. Adequate coverage helps protect savings, the family, and their financial goals and dreams. Good ingredients provide the foundation. But ingredients alone are not enough. Get the Recipe Right You may have the finest ingredients in the kitchen, but if the proportions are wrong, the Modak may still not turn out well. The same applies to investing. Asset allocation is the recipe of a financial plan. Too much of one ingredient can spoil a Modak. Similarly, excessive concentration in one asset or too much money in low-return products can spoil a portfolio. Balance is key. A thoughtfully constructed portfolio brings different investments together in the right proportions. To keep asset allocation very simple - short-term goals can be planned through bank fixed deposits, recurring deposits and debt mutual funds. For long-term goals, one can consider hybrid mutual funds, equity mutual funds or direct stocks. Trust the Process Once the Modak is shaped and placed for steaming, constantly checking whether it is ready will not make it cook faster. Investors often make the same mistake. We keep checking markets, reacting to every correction, chasing recent performers or changing strategies because of short-term noise. Good investing requires patience and discipline. Invest regularly, review periodically and allow your financial plan enough time to work. Compounding is powerful precisely because it rewards those who remain invested for long periods. Sometimes, the best thing an investor can do is simply avoid unnecessary interference. Enjoy What You Have Created Finally comes the most important part - eating the Modak! The purpose of investing is not merely to accumulate the largest possible number on a statement. Wealth should eventually help us fulfil our goals, support our families, create financial security and enjoy life with greater peace of mind. A good Modak needs the right ingredients, the right recipe and trust in the process. A good investment journey needs exactly the same. This Ganesh Utsav, may Bappa bless us with the wisdom to make good financial choices, the patience to stay disciplined, and the prosperity to enjoy the fruits of our efforts. Ganpati Bappa Morya! (The author is a Chartered Accountant and CFA (USA). Financial Advisor. Views personal. He could be reached on 9833133605.)

Silver prices could rise to Rs. 1.3 Lakh by 2027

Mangesh Kulkarni

Oct 22, 2024

2 min read

Currently, silver is trading near a record high of Rs. 96,493. It surged by nearly 36% from March to May 2024. Following this surge, silver has remained within a range of Rs. 78,000 to Rs. 95,000 for nearly five months. Following this period of stability, silver has shown signs of a breakout on daily charts and is expected to surpass a price of Rs. 1 lakh in the near future. Now, let's examine the long-term potential of this valuable metal.

In August 2020, silver reached its peak at Rs. 77,949. Following this peak, it entered into a lengthy consolidation period of almost 44 months. After trading within a wide range of Rs. 52,000 to Rs. 78,000, silver began to rise again, hitting a new high of Rs. 78,000 on MCX. During this consolidation phase, silver created a "Cup and Handle" pattern on monthly charts. This pattern suggests that the upward trend in silver is expected to continue until 2027-28.

It's noted that after breaking out of a "Cup and Handle" pattern, assets often experience a long-term uptrend. By determining the depth of this cup, we can estimate the price target of this pattern. Silver formed this pattern between Rs. 51,857 and Rs. 77,949, indicating cup depth of Rs. 26,092. Adding 1x and 2x of this range to the breakout level, we can calculate the price targets. Rs. 77,949 + Rs. 26,092 = Rs. 104,041 can be the first target for Silver. Similarly, Rs. 77,949 + (2* Rs. 26092) = Rs. 130,133 can be the second target for this "cup and handle" pattern.

The aim of this analysis is to highlight the potential for a long-term upward trend in silver prices. Investors can consider a Silver Exchange Traded Fund (ETF) for a 36 to 60-month investment period. This investment strategy could lead to significant returns over the next few years.

1 Comment

foweh69528

Mar 03

Great article with clear explanations and practical insights. I also checked NiftyTrader while researching the latest Silver Rate Today in Ahmedabad online.