The Hindu Business Line : Money Talk

Meet Mr Anil Rego, CEO of Right Horizons, an Investment advisory and Wealth Management firm. Anil began to dabble in the stock market from an early age of 17. He shares his investing experience with us and offers his advice for investing novices.

When did you start investing: Did you start at an early age?

I started investing at an early ageof17 by borrowing some money from my mother. Once I crossed 18 years, I took a loan against shares from a multi-national bank and invested in the equity market. I used to subscribe to a number of magazines, but then did my research and selected companies that I felt provided good long-term returns. This worked well. I also booked profits and paid off the loan on a timely basis when interest rates went up. This proved useful since the market fell after that, but I had gained a lot of experience by then.

What asset allocation did you start with and how has it changed over the years?

I started with a 100 per cent equity spread across small cap (aggressive) to blue-chip (moderate risk) companies. I have gradually decreased my asset allocation to about 60-65 per cent equity exposure and diversified my investments from direct equity to include various mutual funds and ULIPs.

Which was the first stock you picked, at what age and did you make money on it - any learning from that experience? Are you systematic in the allocation of fi- nances?

The first stock I picked was Gajra Bevel Gears, based on my broker's recommendation. I made only marginal money on this stock. I realised that the advice was ad hoc and after the first three transactions, I never took any broker tips. Over the years, I developed the ability to think objectively on the market and not get swayed by the news items.

This way I felt that the full responsibility was on myself to deliver on the portfolio. I am pretty systematic in the allocation of finances. The disciplined investing approach is what helped me accumulate wealth. In fact, I had planned for my retirement from corporate life when I was 21 years and was able to achieve my goal five years ahead of my plan due to regular investments and good returns! I used to consciously track my progress towards my objectives during the intermediate period.

What is your return expectation?

I expect 20-25 per cent return on equities. Overall, the return would be based on the mix between debt and equity that is dependant on the risk I am willing to take.

Do you prefer direct investing to mutual funds?

I prefer spreading my investments across various styles. Though I continue to invest in stocks, I set aside a portion towards mutual funds, which have systematic investments options, do not require much tracking and are tax-effi- cient.

Some experts believe that young investors can afford a 70- 80 per cent exposure to equity.

Do you share that view?

Yes, but you should not be putting 70-80 per cent only in direct equity/ stocks. Mutual funds are a good alternative for the lay investor. And SIPs allow you to build wealth without giving it too much attention.

Any books on investing that have impressed you?

I have liked the Rich Dad, Poor Dad series. They provide a different perspective to the individual.

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

Better late than never. I feel the economy is to scale new heights over the next 10 years. I will not be surprised to see an index of 25,000 over the next 10 years. More important, statistics have shown that time in the market is more important than timing the market. Regular investing itself can have a very good impact.

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

Do: Plan for your needs. You can achieve both your needs and achieve good returns. If you required take professional help.

Invest for short- and long-term needs.

Try to set aside about 20 per cent of your earnings for investments. Systematic investments in mutual funds is the best way to invest.

If you are very keen on direct equity, start with a dummy portfolio that can be done on various financial portals and monitor on a regular basis before taking the plunge.

Don't:

Put all the eggs in one basket

Wait for the last minute, now is the time to start your investments.

More Stories on : Interview | Investments | Young Investor

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page