WHEN YOU WATCH the trailer of Working: What We Do All Day (2023), a Netflix documentary series, what hits you first is former US president Barack Obama’s baritone. Then comes the message.
“Here’s one of the great ironies of the moment we are living in: the global economy has made a lot of consumer goods a whole lot cheaper,” Obama says. “Today, most people can afford more clothes, more electronics, more stuff than their parents' generation ever could. But try buying a house. A new home used to cost twice your annual income. Now, it's more like six times… So, while your TV maybe getting bigger, the life you can afford might feel like it is getting smaller.”
Sidharth Damani
Sidharth Damani echoed Obama’s sentiments at an investor education seminar in Kottayam on May 16. Damani is the head of investor education and distributor development at Aditya Birla Sun Life AMC (ABSL AMC). The event was powered by THE WEEK and ABSL AMC.
When he asked the crowd about the inflation rate, a rain of answers followed—most were in the 3 per cent to 4 per cent range. But when Damani refined the question and asked for medical inflation rates, there was a quiet moment before someone volunteered “12 per cent”. “You are very close, sir,” Damani said. “It is 13.3 per cent.” He then elaborated that inflation in specific sectors will impact the quality of life, making the need to invest an imperative and not a choice.
The theme of the webinar was Mutual Fund Mantra: How to design your Most Important Investment Plan? Damani was the main speaker, and the panellists were Nisary Mahesh, founder & CEO, Her Money Talks; Sajesh K.V., regional head (Kerala), ABSL AMC; and Manoj D. Sankar, founder, Rfinmart.
The ABSL representative highlighted the importance of systematic investment plans (SIPs). He said that very few instruments provide the kind of support and the range of choices that SIPs do—in terms of choosing the amount, the sector, the funds, asset allocation and so on.
Mahesh stressed that automating investing actions helped beat typical behavioural issues. “When we have to approve a monthly transaction, we think it over and then the reluctance sets in,” she said. “But if the amount is deducted automatically, we might not overthink it.”
In times of market volatility, wars and tariff wars, it is natural for investors to lose focus and exit, said Shankar. “While amputation is a medical choice for some wounds, we do not cut off a limb every time we have an injury,” he said. “Similarly, it is necessary to stay invested in the long term, despite headwinds in between. Only then will the power of compounding kick in.”
The seminar had a lively Q&A session and, as always, the end of the event saw participants pulling panellists and Damani aside for chats about financial instruments, the market and personal portfolios.