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By:

Kaustubh Kale

10 September 2024 at 11:37:15 pm

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....

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. 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.)

Strong economic growth will drive markets in 2025

Writer: Deepak Ramaraju
Deepak Ramaraju
Jan 1, 2025
2 min read

Updated: Jan 2, 2025

Strong economic growth

Indian equities were buoyant amidst a challenging and eventful year with higher volatility. The markets were volatile with multiple global events, a slowdown in the Indian economy, tighter liquidity conditions and delayed government spending. However, a recent cut in CRR is expected to ease the liquidity conditions followed by a pickup in government spending. These two factors are expected to improve overall consumption and pickup in industrial output.


The stock market in 2025 is set to ride on strong economic growth and government efforts to boost infrastructure and digital innovation. Sectors like capital goods, technology, financial services, consumption, and healthcare are expected to shine, with emerging areas such as semiconductors, electronic and manufacturing, renewable energy and electric mobility grabbing more attention.


Capital expenditure by the government till October 2024 stood at Rs 4,66,545 crores, only 42% spent of budgeted Rs 11,11,111 crores for FY25. This compares with ~55% spending in the year ago period. With government stepping up investments in the 2H, sectors such as infrastructure, defence and railways may witness recovery. FMCG, badly hit by urban consumption slowdown, could witness recovery as valuation looks attractive. Besides, with government spending revival and possible interest rate cut in 1HCY25, urban consumption should recover.


IT, which has already recovered from its lows after rate cuts, may do well in 2025 as discretionary spending picks up, provided Trump does not impose any surprise tariffs. Banks may also witness recovery post interest rate cuts resulting in possible pick up in credit growth. Moreover, the recent CRR cut by 50 bps (in two tranches) should boost liquidity and credit growth in the banking sector.


Of course, global events and changes in monetary policies might cause some bumps along the way. That’s why it’s smart to keep a balance—investing in stable large-cap stocks while also tapping into the growth potential of mid- and small-cap companies. A thoughtful mix can help navigate the ups and downs and make the most of what’s shaping up to be an exciting year for equities.


(The author is a senior fund manager, Shriram Mutual Fund)

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