Prajna Capital - An Investment Guide

THE real dilemma today is how to protect wealth from erosion and make it grow sufficiently to at least beat inflation. The volatility has been unnerving and is not restricted to equities; even bonds have seen swings never experienced before. So much so that there was a run on liquid funds in October as risk aversion touched an unprecedented high. Real estate, which witnessed a price spiral in the last three years, is also a major victim of the market slump. Also, compression of time for market moves means shorter window of opportunity to react. Risk aversion and risk premium is at its peak and investments flows have evaporated. So does the turmoil in the markets mean that investors remain passive and wait for the troubled times to pass? Inaction may not be the best solution for one’s portfolio. As adages go, “ Invest when there is blood on the street, sell when there is greed, buy when there is panic .” These words of wisdom which have stood the test of time suggest well thought–out...