Pandemic lessons: Long term equity investment
This one ended happily: One day in July 2019, a friend asked me to help her with an investment problem. We discussed her financial position; which was strong and stable. She didn’t need the money then or ever. Initially, I proposed a 100 pc illiquid structure: 50 pc equity and 50 pc corporate debt. But she demurred and wanted some portion liquid. So, we agreed on 10 pc liyquid and 90 pc illiquid division. We also agreed to divide the illiquid portion equally between debt and equity. She chose fixed deposits for liquid investment and I chose NPS for illiquid investment. Money got invested. NPS-National Pension System- is a regulated entity, its products are illiquid until 60 years of age. It is famed for its low expense structure and easy online investment and monitoring facilities. It also allows you to redistribute your money -once a year- between equity and debt, ranging from 0 pc to 100 pc. Hardly one week had passed, when she began hassling me. Though she had agreed for...