October 22, 2015

Where Mutual Funds Add Value

This is not a post based on my thoughts.  It reflects those of Colaco & Aranha, a Mangalore-based financial advisory firm.  It is a firm that I greatly admire and respect.  For quite some time now, I have considered giving readers of this blog a slice of their wisdom: something that I have personally benefitted from.  As the firm completed 30 years in business this week, it struck me as a good opportunity to do so.

In particular, I would like to share a video of a presentation by Mr. Gerard Colaco, partner at the firm, about the areas where he sees mutual funds adding value.  But before stepping into the video, it may help to have a quick look at some of the firm’s beliefs (a few of which come up in the presentation as well):

  • Never expect an investment adviser to take a greater interest in your money then you yourself have a duty to take.
  • The ideal client-adviser relationship is one of partnership, not dependency. An investment adviser must make investor education an essential part of his practice. The better informed, interested and participative the client, the better will the expertise of the adviser be exploited.
  • All investment must form part of a plan. It is never too late to plan. Having a plan without the money to invest is better than having money to invest without a plan.
  • Investment principles are universal but investment plans are unique, because each individual is unique with unique circumstances, needs and temperament.
  • Financial responsibility is far more important than financial literacy, just as common sense is far more important than cleverness.

This, then, is the link to the presentation.  It has a running time of about 2 hours.  This presentation was made a few years ago.  Since then, there have been regulatory changes, and changes in tax laws, but most of what is said continues to remain very relevant.  This video is courtesy of Simplus Financial Consultancy Private Limited, an associate of Colaco & Aranha.

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