Prajna Capital - An Investment Guide

Mr. Iyer made very clear to his investment advisor that he does not like taking risk. A normal thought that would cross any advisor’s mind when an investor states what Mr. Iyer said is either that the investor does not want to risk his capital and wants to ensure that his capital remains intact or the second thought is that the investor does not want to face the risk of running out or falling short of money when he is nearing his financial goal. While a lay investor might struggle to put both the above in perspective, reality is there can be vast difference in perseverance of risk. When normally an investor opts for so called safe investment avenues such as fixed deposit, he is protecting himself against the risk of volatility. He seeks comfort under the disguise shelter of safety of capital. However at the very same moment he is risking himself against the risk of losing out to inflation in the long run. His investments earn negative real rate of return . This means he may not have en...