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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.)

This Diwali is about Defence Funds

Writer: Mangesh Kulkarni
Mangesh Kulkarni
Oct 31, 2024
2 min read

The Nifty India Defence Index, which tracks the progress of defence-related companies listed on the stock exchange, has delivered a compounded annual growth rate of 26.8 per cent over the last five years, surpassing the broader Nifty 50 benchmark. However, this index has recently experienced a significant downturn from its 52-week high. The Nifty India Defence Index reached its peak of 8,302 on July 11, following which it saw a steep decline. At present, this index is trading at 6,808, showing a decrease of nearly 27 per cent from its all-time high.


Except for one company, Zen Technologies, all other constituents of the index are down from their all time highs, ranging from 15-50 per cent. We think the recent decline is due to overvaluation. The fundamentals of defence companies remain solid. The drop in stock prices has led to Mutual Funds like the Motilal Oswal Nifty India Defence Index Fund being offered at discounted rates. The Mutual Fund’s Net Asset Value (NAV) for the Regular Plan is currently trading at Rs. 7.94.


Defence Mutual Funds are made up of companies primarily involved in research, development, manufacturing, or selling products and services related to defence and military operations. They fall under the category of thematic mutual funds, providing investors with a chance to be part of a sector crucial to national security and benefiting from government defence spending. The defence sector’s financial foundation is stronger than ever, given the continuous rise in India’s defence budget year after year.


The defence sector in India is on the rise, with defence production revenue exceeding Rs. 1 trillion, marking a notable increase from the previous year. The ‘Make in India’ initiative and the push towards Aatmanirbhar Bharat in defence manufacturing are expected to boost the sector’s growth. Considering the long-term prospects of the defence sector, we see potential in Defence Mutual Funds. Investing through SIPs in defence funds can lead to decent returns over the next 3-5 years. It’s advisable for investors to avoid making large lump sum investments and instead opt for SIPs.

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