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Stock Market Collapses on a Family - Some lessons from a tragedy

It seems that NOT all are receiving the good wishes

I wish you all everyday and in every post  ....

 

The Stock markets are tumbling and taking a bad fall all over ...

Along with the families who have substantial funds invested in it

 

The price of this free fall is being paid by families like those of

Karthik Rajaram, an NRI who shot his wife and three sons

after his funds were wiped out in the current collapse ...

 

An IIT Chennai graduate and an MBA from the University of California,

Kartik had gone bankrupt after the stock market crash....

 

My sympathies are with those who have lost a good amount of funds

in the stock market, but only to an extent ... It ends where common sense

is deliberately disregarded to fulfill lust for short term gains and

where risks taken are not calculated ......

 

The lives lost cannot be regained, but their deaths can at least

be used to salvage some redemption for them if the rest were to

learn lessons in common sense from this tragedy ...

 

Lesson no. 1 - Do no put all your eggs in one basket. 

 

A cardinal priniciple of survival is having a contingency plan

That means having options or creating them where they don't exist ..

And if it is not possible to do that, then the venture shouldn't be

attempted unilaterally, but only after taking everyone into confidence

who are bound to be affected by taking such a big risk ...

 

And if one is a family Man, such ventures without contingency plans

are a strict No No ...howsoever tempting and attractive the offer may seem ...

 

Always consider the "what if" scenario ...

What if it fails ?? where does that leave you??

especially if you have no options or have prepared for none ..

 

If you can handle the odds,

If you feel confident of handling the odds,

And most importantly, if the rest who are going to be affected

are with you in all of this, then and even then ...

reconsider before going full steam ahead ...

 

 

Lesson no 2 - Save for the rainy day until you break even

 

As you keep on earning a profit, set some aside until you break even

before you start taking bigger risks ... A good rally or a good

break initially shouldn't result in going all out ....

 

Believe me, Not even if the gut feeling is right

Because when you are on a roll, every feeling feels like gut feeling

 

Unless you are a person who has grown up listening to his conscience

a LOT, believe me again, you won't be able to distinguish

between the feeling of confidence due to euphoria of success

and a real solid gut feeling ......

 

SAVE until you break even (and do factor in the rate of inflation when you save)

Once you break even, then go with your gut feeling in taking risks, if you have to ..

 

For then even if you lose, you will at least be back to square one rather

than in the hole from where you won't be able to pull yourself up ...

and where suicide looks a very inviting option ...

Not the kind of option you wanna work with ...

 

Lesson 3 - INVEST

 

Invest some of the profits in guilt edged securities ...

Once you break even, you may take bigger risks ...

If they pay out and you make a profit, set some aside for

investing in safe securities ...

 

Your financial adviser would be able to guide you in this ..

GET ONE - You won't regret it ....

These people spend their working day studying the Financial

markets and the economy ... they have a better hold on the

pulse of the market and economy ...

 

Just one caveat - Get someone who who you trust and

someone who knows the value of hard earned money

and how to manage it .....

 

This short article is by no means to serve as a portfolio of finance

But just an outpouring of thoughts brought on by tragedies

like those of Rajaram, which could have been totally avoidable

 

The biggest loss is of lives of Rajaram's children

which were yet to flower and were snuffed out for no fault of theirs ....

 

They were the Investment that would have paid off all of His debts

If only Rajaram had invested some of his funds to give them a future

away from the burning pyres ....

 

May God bless their souls...

 

1 comment:

GOOD ONE

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