Investors Success Stories

V K Dhar

I met Mr V K Dhar about 13 years ago for soliciting some investment in mutual funds. He was then investing primarily in stocks directly on his own. He felt he was doing well with stocks and shifting to mutual funds didn’t attract him. Besides stocks, he had invested in bank FDs, ULIP plans and company fixed deposits also. In many ways, his investments were all over the place. I advised him to consolidate his investments. He agreed to invest a small amount in mutual funds and promised that if he liked the experience, he would increase the investments in them.

He began investing in mutual funds with a small amount of Rs 1 lakh duly allocated to equity and debt funds. In May 2004, during the market fall, his stock portfolio declined by 35% but his mutual fund portfolio fell by only 10%. He thus saw the benefit of mutual funds and started shifting his investments from direct equity to mutual funds. By the end of 2005, he divided his portfolio 50/50 between direct stocks and mutual funds. He realised that without proper knowledge and research, stocks are just like black boxes. He felt that he could simply leave it to the expert and focus on his business.

In 2010, we decided to design his portfolio in the best way possible. First of all we understood what his wealth goals were. He had a total portfolio of about Rs 2 crores. Also with a good business in the paper industry, he wanted to preserve his wealth with a return that beat inflation. We compiled all his investments and analysed his risk tolerance. Subsequently, we set the asset allocation in line with his risk tolerance. This systematic approach worked very well for him and for his portfolio. Today we sit every year to review and rebalance his portfolio and ensure that underperforming funds are replaced with better ones.

As his experience with mutual funds got better and better, he kept increasing his allocation to them. His current portfolio consists of about 90% mutual funds and the remaining 10% in stocks and tax free bonds. He has redeemed his investments in fixed deposits and ULIPS completely. Focussing on mutual funds has not only improved the performance of his portfolio but also provided him much needed peace of mind. Now he focuses more on his own business rather than watching the stock market movements all day long.

Aditya Shrivastava

Aditya Shrivastava has been investing in mutual funds for the last 12 years. Both he and his wife, Madhuri, are working. Back in 2010, they were investing Rs 10K per month in equity funds. Then they opted for our comprehensive financial planning services. When we set up their goals and found out the quantum of investments they required, we calculated that to achieve their goals, they needed to invest Rs 50K per month. Also the plan required them to increase their savings by at least 10% every year. Their actual investment of Rs 10K per month was quite insufficient. They then tweaked their budget and committed to maximise their savings. Initially, it was tough for them to settle for a lower monthly expenditure. But the enthusiasm to address their goals made them invest Rs 30K per month. Though that amount was also not sufficient, still tripling their savings from 10K to 30K was highly significant. Just after 6 months, they increased their SIP to 35K per month.

Since then Aditya and Madhuri have been increasing their SIPs regularly. Currently they are investing Rs 50K per month. Their portfolio has grown from Rs 5 Lakhs then to 55 Lakhs now in 5 years.

After the budgeting, Aditya and Madhuri knew

1. How much they could invest
2. How much they could spend