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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)

The Sule and Fadnavis Saga

Updated: Nov 15, 2024

the Sule and Fadnavis Saga

Mumbai: In the season of political fireworks and mudslinging, most other wars pale in the face of the war of words between Devendra Fadnavis and Supriya Sule. Barely two days ago, Fadnavis called Sharad Pawar the “owner of a fake narrative factory”, a statement that was condemned by the NCP (SP)’s top brass while Ajit Pawar maintained a “no personal remarks of Sharad Pawar” policy.


Only a week earlier, the NCP (SP)’s working president Sule had demanded Fadnavis’s resignation accusing him of treason for leaking confidential government files to Ajit Pawar. The file in question was the one which had orders for an investigation into Ajit for his alleged role in a multi-crore irrigation scam. The controversy was raked up by Ajit himself when he accused former home minister of the NCP, R R Patil for signing on this file supposedly to get Ajit into trouble. “A case should be filed against Fadnavis and he should resign. This is treason against the state and the people of Maharashtra who had voted for him to be the CM,” Sule said during a public rally in Kolhapur.


This isn’t the first time that Sule has made Fadnavis the target of her political anger with the BJP. She has systematically targeted him specifically in his role as the home minister of Maharashtra. Last year, she accused him of ‘breaking’ the Pawar family by getting Ajit Pawar to split the NCP. In the gruesome Pune Porsche case where a young man and woman were mowed down and the accused were initially let off lightly, she demanded Fadnavis’ resignation as an inept home minister. After the heinous Badlapur case where a school sweeper was accused of raping two nursery-going toddlers, the feisty Member of Parliament trained her guns on Fadnavis.


The Pawar-Fadnavis rivalry isn’t a new one. Also, it goes beyond the battle for political one upmanship. A member of the NCP (SP) recalls that Fadnavis had tried to break the supremacy of the NCP patriarch by side-stepping him as he took over as chief minister of Maharashtra. He realised that the influence of the NCP and the Congress stemmed from cooperatives—milk, sugar, banks or poultry and Fadnavis tried making in-roads into those to spread the BJP’s wings into what was traditionally NCP-Congress territory. That apparently was an initial point of conflict. Pawar didn’t fail to publicly remind Fadnavis that he had been friends with the then new chief minister’s father, Gangadharrao Fadnavis.


It is no secret that senior leaders of all parties consult with Pawar senior on crucial matters of the state, according him the regard that a senior leader commands. Be it Uddhav Thackeray or even Eknath Shinde as the chief minister, they have publicly acknowledged Pawar’s “guidance” on matters as varied as farmer concerns, Covid management and cooperatives. “Even politicians who have crossed over to other parties still maintain a warm rapport with him. An example is Uday Samant. Even Raj Thackeray may criticise him during public speeches but personally, shares a good relationship. That’s the kind of politics he enjoys; not one of animosity,” says NCP (SP) politician.


Their rivalry is nothing more than political chess, with each waiting to ‘checkmate’ the other. With Pawar refraining from making political remarks on his opponents, the NCP (SP)’s charge against Fadnavis and the BJP is led by Sule.


“Pawar and Sule enjoy good relations with most politicians across party lines. Fadnavis is an exception. He tried to break their party stronghold of western Maharashtra’s cooperatives,” says the NCP (SP) leader.

This mutual dislike isn’t new. Way back in 2016, Sule had likened Fadnavis to “women who fight at community water taps” further stating that he was unable to handle the responsibility that came with the chief minister’s position.


The rivalry had further deepened over the years. Fadnavis tried to break the undivided NCP’s chances of forming the government in 2009 by planning a midnight coup that involved wooing Ajit Pawar and other MLAs. The attempt, although unsuccessful, wasn’t forgotten by the Pawars. The second blow came when Ajit split the party, allegedly at the behest of Fadnavis and the BJP, supposedly compelled by the charges the investigative agencies had levelled against him. “There is real bitterness between them,” says the NCP (SP) politician.


With this background, Sule doesn’t miss an opportunity to hit back at Fadnavis who has managed to hurt her family and her party. As Pawar’s daughter, she is set to carry on the rivalry and avenge the damage her father has suffered.

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