The Hindu Business Line : Money-Talk

Mr V. Mahadevan, CEO of Wealth Advisors India, is a seasoned hand in the financial services industry. Wealth Advisors, promoted by him, is today among the leading distributors of financial productswith assets under advice of over Rs 250 crore. A chartered accountant and a company secretary by qualification, Mr Mahadevan, 46, has, in a career spanning two decades, done stints in New India Assurance, GIC Mutual Fund, Birla Global Finance and DSP ML. He shares his personal experiences on investing with Business Line:

When did you start investing and what led you to do so?

I started investing in 1983. I was studying then. My first investments were made out of my father's money, which he gave me to invest. I was quite attracted by the stock market

What role do investments such as gold, property play in your overall plan?

All of these are in my portfolio. My portfolio consists basically of equities (both mutual funds and shares), term insurance and RBI bonds. I have been investing in mutual funds since 1988. In addition, I buy gold every year. I bought my first piece of property for self-occupation and later added more as an investment. My portfolio is constructed in such a way that while I can enjoy the upside from equity and property prices, I do not lose sleep in the case of any correction in stock prices.

Which was your first investment, at what age and did you make money on it? Any learning from that experience?

My first investments, even as I was studying, were secondary market purchases of MRF, Sundaram Finance and Glaxo — all in 1984-85 . I based my investments on the financials of these companies. I did not start out as a long- term investor. Though I made money, a longer-term horizon would have given me better returns. I also lost money on my investments in stocks such as Chamundi Mopeds and Kunal Engineering — thankfully, these were small. I bought them for a quick buck, based on tips. I stopped (buying based on tips) then.

What is the extent of returns you expect from your investments?

On debt/arbitrage investments, I expect about 6-8 per cent and on equity investments about 15-20 per cent. I have also invested in property with a longer- term view, using controlled leveraging. Gold is a smaller asset class. I am happy with a 7-8 per cent return on property (excluding capital appreciation) and I use gold as a hedge.

What would be your advice to investors who have missed out on the entire equity rally of the past five years? Can they start now?

I think that this century belongs to India. It is time we started believing in the power of India and the potential of the equity market. If you have not yet started, you can start now. Start small and steady. Read and understand. Look out for credible advisors. Homework is necessary. For beginners, Systematic Investment Plans of diversified mutual funds are ideal.

Finally, your advice on three things that youngsters should/should not do when they start off.

Start investing early in life, however small the amount may be.

Investment is a process and a disciplined one. It is not all about hype and is not opportunistic as is made out to be.

Do your homework to the extent possible. Take the support of credible financial advisors. Tips, many a time, can trip you.

As told to Aarati Krishnan

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