Quiz Questions (Part II)

Quiz 1: The closing Ceremony of olympic games was held on the same day of the month the opening ceremony of Olympics held somewhere else some years later. The difference between the years of both the days of same month is multiple of 10. Can u identify about which two Olympics games I am asking about?

Quiz 2: Name the common link between, Bill Sikes, Mr Micawber, Wackford Squeers, Betsy Trotwood, Pumblechook and Quilp.

Quiz 3: Name the financial exchange that let's companies buy, sell and hedge patent rights, just like any other asset.

Quiz 4: Which two cars are the official limousines of American Presidents. Name of one these cars entered into the Webster's Dictionary as a synonym for 'the best'.

Quiz 5: How many total sponsors are there of Olympic Games and what are these sponsors collectively known as?

Quiz 6: What is the minimum age required, in theory, to join Facebook?

Quiz 7: Name the female only regiment, the first of its kind in Asia, that was set up by Subhas Chander Bose, to fight for Indian Independence.

Quiz 8: Why was it not possible in Ancient Greece to stitch a sponsor's logo to an Olympic athlete's shorts or singlet.

Quiz 9: Name the sport in which Crown Princess of a Royal Family participated at the Olympics.

Quiz 10: Name the sport in which left handed players face discrimination.

Quiz 11: V.S., V.S.O.P, XO, Napoleon are different quality grades of what category of alcohol?

Quiz 12: Analyse the featured pic and name the company whose logo evolved from the name of the featured player. The company’s name literally means ‘chirping of birds’.

Quiz 13: Name the company that refurbished its logo in 2010 to change the color of one alphabet in its logo from yellow to orange.

Quiz 14: Name two countries, participating in London Olympics, whose contingent of players, has more women than men.

Quiz 15: What was that one important thing that Pierre de Coubertin, the person who revived the Olympics in 1896, changed about the Olympic Games.

Quiz 16: Name the brand, that is named after an Olympian Greek God whose portrait is pictured below.

Quiz 17: The pic features the logo of a beer brand. Name the brand.

Quiz 18: The Facebook shares, listed on Nasdaq on May 18, are currently trading at around USD 20 a piece. At what price did the stock made its debut ?

Quiz 19: Name the university in US, that houses a library in which books are cleverly retrieved by robots.

Quiz 20: Name the company . . .the company, formed by 11 engineers in 1984 at the Chinese Academy of Sciences, is the sponsor of National Football League, America for the next season.

Quiz 21: Identify the monument/ building/ structure from the sign in the pic...

Quiz 22: Identify the hotel from the pic.

Quiz 23: At what temperature do the fahrenheit and celsius coincides?

Quiz 24: Which global religion, the only global religion to have been invented in the last 200 years, believes that God created out of chaos, rather than out of nothing?

Quiz 25: Name the company/ product....This company,formed by a Danish Carpenter in 1949, makes toys. At present there are roughly 75 bits of this toy for ever person on the planet.

Quiz 26: Which world leader, also the head of a country, has 6 wives and 21 children?

Quiz 27: According to Big Mac Index, if a Big Mac costs USD 4.33 in US, USD 2.79 in Russia and USD 5 in Brazil. Which country's currency, as per Big Mac Index, is undervalued relative to USD?

Country Risk Analysis: Indian Economy

Country Risk Analysis: Indian economy

Last year I read a report which said India’s economic growth is set to overtake China’s economic growth in a couple of year. It also said that by 2050, China, America and India are poised to be the three biggest economies. However the report listed these findings subject to some caveats related to country risk analysis. I make an attempt here to discuss these caveats and analyze their implications on the general well being in 

context of the Indian economy.

1. How sound is the fiscal/ monetary policy?

A persistent ratio of Fiscal Deficit to GDP over 4% is viewed with concern. Countries with ratio of debt to GDP of more than 70-80% of GDP are extremely vulnerable.

The central bank needs to be commended for maintaining an independent monetary policy and taking effective measures to balance growth with inflation. It’s the fiscal policy which is leaving the economy barefooted. Currently the central bank is raising rates in hope to rein inflation by squeezing money supply. But the inflation is proving to be sticky and not responding quickly to monetary tightening. Part of this can be blamed to lack of tandem in monetary and fiscal policy. Government is spending more than its earnings and the spending is acting like a stimulus. This stimulus is aiding growth and fueling inflation. Worst still the government spending is increasing in non productive areas like subsidies and populist social programs which lack metrics for performance and delivery mechanism effectiveness measurement.

2. What are the economic growth prospects for the economy

The economic growth prospects of India look so much like Virender Sehwag’s batting.  One day the economy looks like its invincible and portrays a healthy picture for future growth. The very next day, economy starts looking vulnerable The long growth prospects of the economy looks very optimistic. But after Lehman brothers and Euro crisis, who has seen long term. Still the policy paralysis in a difficult environment has stalled the growth momentum. The medium term growth prospects depend largely on external macros and internal proactive policy.

3. Is the currency competitive and are the external accounts under control

A small current account deficit on the order of 1-3% of GDP is probably sustainable, provided that the economy is growing. The current and near term projections for current account deficit is 2.7 % of GDP. Though there may be a spike in import bill on account of depreciating Rupee, exports too may rise easing the burden on current account deficit. The current account deficit is within reasonable limits and is likely to be so in the medium and long term. But at the same time, current account deficit poses the maximum risk to India’s economy. Any substantial shift could lead to a run on the Rupee and the economy could come under serious stress. Phasing out subsidies and an efficient tax system has become indispensible.

4. Is external debt under control

India’s has a current account deficit so it borrows money from abroad, or in other words foreigners are net investors in the country. But the amount of money India has borrowed in within bounds on a relative basis.

5. Is liquidity plentiful

By liquidity we mean forex reserves in relation to trade flows and short term debt. An important ratio is reserves divided by short term debt. A safe level is  200% while a risky level is under 100%. The country is sitting on a reserve base which is roughly equal to short and medium term external debt. This limits the ability of RBI to intervene in the forex market to support the rupee in times of downward pressure of Rupee. Still the situation is not as comfortable and as regards the forex reserves India is just within its means.

6. Is the political situation supportive of the required policies

In India, as in America, being in opposition means opposing every policy move of the ruling party even if it means opposing your original stand.  There is a talk of party paralysis in India thanks to inaction of UPA. But there’s a lot of contribution of opposition parties to this policy paralyses. Without getting into this debate, this factor is the biggest contributor to country risk of India. In fact on a valuation metric, political risk will have the highest beta.

Overall I would like to wait for a couple more months before starting to under weigh India in my global portfolio. The country risk premium is relatively high compared to other emerging economies. The economy is facing strong headwinds from abroad and tailwinds from within the country. Big steps need to be taken to ramp up the GDP and its growth metrics.

Business Quiz

Business Quiz: 

Sum does some brain storming to prepare a few mosaic Quiz Questions. Try how many you can answer (Answer them by leaving a comment and leave your email address to know the correct answers)

Quiz1: Name the airline that used a famous Belgian Statue of a urinating child in one of its advertisement and used the words “pissed off high fares?” to play a spoof on one of its competitor's high fares.

Quiz2: Which head of an airline served in full cabin crew uniform as a flight attendent on a competitor airline’s flight after losing a bet on F1?

Quiz3: Which English word meaning "the faculty of making fortunate discoveries by accident" is derived from the name of an island in the Indian Ocean? How is it derived?

Quiz4: Name any other city that you can create by shuffling the letters in TOKYO?

Quiz5: Adnan Nevic, born on Oct 12, 1999 in Sarajevo, Bosnia; what is special about this person?

Quiz6: Which famous company derive its name from the last letters of the city that inspired it. 

Quiz7: Where on the earth would you find "one hundred thousand islands"?

Quiz8: Translate “Can’t you see this” into a Hindi idiom to name the F1 driver who is also the brand ambassador for a hair care product.

Quiz9: Name the company. Its business model is offering a daily discount deal, whereby the buyers/ customers buy a product or service very cheaply if a minimum number of people sign up for the offer.

Quiz10: Which animal is reputed to have a thousand legs?

Quiz11: Which famous gun derives its name from the two cities where it was designed and manufactured? 

Quiz12: Which American Multinational recently put out an advert seeking applicants for job vacancies? They said in the advert that ‘sexual minorities’ (transgenders, gays, lesbians, bisexuals) would be given extra points in the screening process. (The advert was later withdrawn due to public uproar).

Quiz13: Which Multi-National Company is named after a type of African antelope?

Quiz14: Name the politician. He is the mayor of a city in US and we have a Television channel by his name in India.

Quiz15: Name the politician whose teenage daughter got pregnant when she was campaigning for a political post. She also said during campaigning that “Russia is just across the border of an American state”.

Quiz16: Name the famous monument in Africa that features a scantily clad man and woman, holding a child. It’s a bronze statue built with a colossal expense of USD 27 millions.

Quiz17: Analyze the featured pic to name the product launched in 1990 by a legendary auto company. The product uses a type of patented engine that produces a "potato-potato” sound.

Quiz18: During which cricket match in India the crowd gave Pakistan a standing ovation after they defeated India…in India!

Quiz19: Name the fruit/ vegetable which gains prominence in the coming week. A type of beer is also brewed from this fruit/ vegetable. (Try and explain the reason for prominence)

Quiz20: Name the concept that is used by a publishing house to determine undervalued/ overvalued exchange rates based on an informal way of measuring. The pic features a very important element of this measurement concept.

Quiz21: Name the product I am referring to - Queen Victoria received this product as a wedding gift. There are over 2000 varieties of this product one of which is Leicester. NASA exploited a myth about this product to play a spoof on April fool’s Day.

Quiz22: Combine the name of a popular Bollywood movie based on Alzheimer's disease and the actress featured in the pic to name the company I am referring to.

Quiz23: Which airline’s flight steward quit his job by opening the door of a moving aircraft and jumping out through plane’s emergency chute?

Quiz24: You 'never' actually own this product, you merely look after it for the next generation. Name the brand who claims this.

Quiz25: Name the car company, whose cars are said to have a grill which look like a Greek Temple.

Quiz26: He used the code word of India - Sri Lanka cricket matches to receive and pass secret information. Name this head of a US company who was recently sentenced to prison over charges related to financial sector.

Quiz27: What is featured in this pic?

Quiz28: What is featured in the pic and what is this particular place called?

Quiz28: The Economist and Harvard Business Review have carried out separate articles on this “Hindi” word which roughly means frugal innovation. This term is also used for a type of a vehicle in rural India. Name the word.

Quiz29: Which Governor of a state in US recently ordered all the state employees to answer their phone by a particular salutation? This was done to boost employee morale and help sell the state to outsiders. (Hint: Only a lady can think of such a thing)

Quiz30: Name the non government organization whose logo is featured in the pic. The organization was formed in 1961 in England. The present Secretary General of this organization is an Indian.

Quiz31: Name the destination featured in the pic (Hint: Its an exotic SPA destination)

Quiz32: Name the famous animated sitcom which has a character called Maggie? It also was awarded a star on the Hollywood wall of fame. It is also famous for the annoyed grunt of one of its characters, “D’oh”.

Quiz33: Name the Bollywood actress who has live in Hong Kong, China, Japan, France, Switzerland, Krakow, Berlin, Belgium, Hawaii and England before moving to Mumbai?

Quiz34: What is common in these cities - Monaco, Melbourne, Valencia and Singapore?

Quiz35: Name the auto brand which derives its name from a river in Italy. There are museums devoted to this brand in Milan and England. The Indian government acquired this company in 1950 and after hitting record production in 1985, the production of this brand was ceased in India in 1997.

Quiz36: Name the car company - The world of bullfighting is a key part of this company’s identity and it names most of its cars based on the name of bulls

Quiz37: Name the brand whose advert featured models in the nude, wearing only shoes and a python wrapped around them. Also name the models.

Quiz38: The nickname 'SoLoMo' given by a popular venture capitalist refers to which three computer technologies.

Quiz39: Which international hotel chain advertisements feature these celebrities – Lance Armstrong, Christian Louboulin and Jerry Hall (among others)? Hint: Each featured celebrity has chosen a charity to which the hotel chain has made a donation of USD 10,000.

Quiz40: Name the company whose proposed headquarters in US is a ring shaped structure dubbed as spaceship.

Quiz41: Name the brand which the following tagline: ". . . . . mixes with everything except driving".

Quiz42: Name the airline: In Mar 11, the recording of an inflight transmission of one of its pilot's unintentional conversation with his copilot was released to the press. The conversation had foul language and discussed gay, overweight and older flight attendants.

Quiz43: What am I referring to when I say QE, QM, QV ? Name the company who owns these brands. Hint: Its related to travel industry. Its also got something to do with Monarchy.

Quiz 44: Which internet domain was launched in September and the addresses went on sale?

Quiz 45: What is common between New York City, London, Milan and Paris?

Quiz46: Name the brand associated with the following product names:

Red, Black, Green, Gold, Blue, XR21 and King George V

Quiz47: Name the brand associated with "eternity ring", "trilogy" ring and the "right hand ring".

Quiz48: Which airline would you be flying if you fly by "Queen's Own Aviation Company".

Quiz49: Name the airline in which cabin crew used to sing in-flight safety instructions (or sometimes interpret the instructions artistically). The featured picture depicts a Television Show that promoted the airline with a specialized concept. The airline ceases to exist now.

Quiz50: Name the country which is also referred to as the ‘eighth continent’ because of its rich biodiversity; 80-90% of the plants and animal species found in this country are found no where else in the world.

Quiz51: Name this fortnight long fair in which more than 7 million liters of beer is consumed. This is the largest people’s fair in the world.

Quiz52: Name the Company that played an April fool spoof on its subscribers wherein if anyone clicked on the company website’s main page, the whole page turned upside down. The company claimed this was a new layout.

Quiz53: Name the airline whose advertisement is featured in the pic. The advertisement appeared in the March 19th, 1979 issue of major dailies in the west. Yes, the shadow is in pretty much in the same place as where the planes hit on September 11^th, 2001. (I’ve cropped the pic to remove the name of the airline)

Quiz54: Name the airline. Every plane in this airline’s fleet is named with a destination containing some part of the airline’s name. The airline is also known for it’s “letter ads” i.e. the ads starting with Dear….and ending with Sincerely…

Quiz55: Relate the featured image to name the NGO which is one of the older human rights associations. It has a separate prison committee to provide assistance to its members who have been imprisoned, tortured, threatened, attacked, made to disappear, and killed for the peaceful practice of their profession.

Quiz56: Name the person. He became leader of a country in 1975. His policies and torture/ force resulted in the deaths of approximately 21 percent of the country’s population (approx 2.5 million people died under his leadership). Gas chambers were one of the ways used by him to execute people.

Why is depreciating Rupee a cause of concern?

The next two years of policy action (or rather inaction) will decide the fate of India’s growth story. It will decide whether India will emulate Greece or Chinese economy in the next decade or so.  Everyone expected India to be rather isolated from the sovereign debt crisis and rather be the growth engine for global economy along with China. But it is turning out to be the other way around. Depreciation of rupee relative to dollar is making news and is hurting when it hurts the most.

Rupee Depreciation

Rupee is currently trading at its cheapest level (in nominal terms) relative to the dollar. It is currently the worst performing Asian currency and its fall has been fairly steep. The depreciation makes Rupee cheaper to buy for the foreigners and it makes the foreign exchange expensive to buy for Indians. This makes Indian exports cheaper and imports expensive. If we compare the valuation of rupee relative to dollar in terms of purchasing power parity (by accounting for inflation); the rupee is overvalued even at these levels.

Why a depreciating Rupee is a cause of concern?

• India is heavily dependent on oil imports. A weak currency makes these imports expensive. Worst part is that these expensive imports are heavily subsidized in India
• High interest rates in India caused a lot of domestic companies to borrow abroad in the form of external commercial borrowings. The depreciation is hurting these companies hard as the interest and repayment of principal in foreign exchange is expensive. Indian banking system is cramped up because of excessive borrowing program of the government to plug its burgeoning fiscal deficit. This limits their lending limits to the private sector and demand for capital by the government is crowding out the private sector. Thus private sector sought permissions to borrow abroad which is hurting them in the light of a steep depreciation of rupee
• Though India’s external debt is not at very high levels, still currently the external debt of USD 313 billion is almost equal to the reserves of USD 330 billion. This limits the active participation of RBI in the money market to stem the steep fall of rupee and keep it near its desired levels. The reserves are not large enough to afford a money market intervention.
• Due to a current account deficit position (imports more than exports) the economy is dependent on inflows from abroad. The dependence on foreign inflows is keeping the economy on tenterhooks as any further depreciation will make it difficult for the RBI to accommodate outflow of foreign exchange by the investors in case of a global event. RBI may have to put controls in that case which might result in a full blow exodus of capital from India; the worst case scenario; but highly likely possible.
• India is running a very high fiscal deficit; close to double digits if we take the deficit of states into account. The deficit is being financed by foreign investment. The dependence on foreign investment to bridge the fiscal hole which is on account of unproductive subsidies and concessions and not on account of productive capital investment risks a catastrophic fall in the currency in case of a global event.
• Every major economy from US to Japan and from China to Korea is trying hard to keep its currency cheap relative to other currencies to give its exporters an advantage over other countries. Cheaper currencies make exports cheaper and thus the advantage. In fact China has accumulated hoards of American Dollars only because it aimed to keep its Yuan undervalued relative to the Dollar. It thus continued to buy Dollar is the money market to keep Yuan relatively undervalued. A depreciating rupee is good news for Indian exporters and it makes Indian exports cheaper. But there is little to rejoice as India currently is a net importer. Policy inaction and lopsided decision making is ensuring no major impetus to Indian exports. 

How credit risk can be hedged / transferred?

A tutorial on how credit risk can be hedged / transferred using the credit risk instruments. 

(Key inputs from CFA Institute Readings)

An investor faces three types of credit risk. The risk of default, credit downgrade of the debtor and widening of credit spreads on the debtor’s debt. The credit risk that the investor faces can be sold off to another party, basically like any other insurance contract. The party who assumes the credit risk (or who buys the credit risk) is called the credit protection seller. He may be willing to take this risk for several reasons. He may buy because he believes that the credit quality of the debt will improve. He may see value addition in some major corporate events like mergers or refinancing of debt at lower rates. All these would be positive credit events for the credit protection seller.

There are basically three products that transfer credit risk – Credit Derivatives.

1. Credit Options

                                                               i.      Credit options written on an underlying asset

                                                             ii.      Credit spread options

2. Credit forwards
3. Credit swaps

Credit options

1. The triggering events of credit options can be based on either
1. The value decline of the underlying asset
2. The spread change over a risk free rate
2. Credit options written on an underlying asset
1. Binary credit options provide payoffs contingent on the occurrence of a specified negative credit event
2. There are only two options

                                                               i.      Default

                                                             ii.      No default

3. If the credit has not defaulted by the maturity if the option the buyer receives nothing
4. The option buyer pays a premium to the option seller for the protection afforded by the option
5. Pay off can also be based on the credit rating of the underlying asset
6. A credit put pays for the difference between the strike price and market price when a specified credit event occurs and pays nothing if the event does not occur
2. Credit Spread Options
1. Payoff is based on the spread over a benchmark rate
2. Pay off formula

Credit Forwards

1. Their payoffs are based on the bond values or credit spreads
2. If a credit forward contract is symmetric the buyer of a credit forward contract benefits from a widening credit spread and the seller benefits from a narrowing credit spread
3. The maximum the buyer can lose is limited to the pay off amount in the event that the credit spread becomes zero

 Credit Swaps

1. It is a contract that shifts credit exposure of an asset issued by a specified reference entity from one investor to another investor
2. The protection buyer usually makes regular payments to the protection seller
3. In case of a credit event the protection seller compensated the buyer from the loss on the investment and the settlement by the protection buyer can take the form of either physical delivery or negotiated cash payment equivalent to the market value of the defaulted companies
4. CDS can be used a hedging instrument
5. Banks can use the CDS to reduce credit risk concentration
6. Instead of selling loans, banks can transfer credit risk by means of CDS

Situational profiling an investor by stage of life

Situational profiling an investor by stage of life

In life stage classifications, investment policy and particularly risk tolerance are determined by one’s progress on the journey from childhood to youth and adulthood, maturity, retirement and death. A person’s ability to accept risk should begin at a high level and gradually decline through his lifetime, while willingness to assume risk should be driven largely by cash flow considerations. An individual’s investment policy can be viewed as passing through four general phases:

o   Foundation

o   Accumulation

o   Maintenance

o   Distribution

Foundation

The individual is establishing the base from which wealth will be created (marketable skill, establishment of business, acquisition of educational degree). During this phase, the individual is usually young, with a long time horizon, which normally would be associated with an above average tolerance for risk. Risk tolerance should certainly be above average in the foundation stage if the individual has inherited wealth. Lacking such wealth, the foundation phase may be the period when an individual’s investable assets are at their lowest and financial uncertainty is at its highest.

Accumulation Phase

Earnings accelerate as returns accrue from the marketable skills and abilities during the foundation period and gradually reach their peak. In the early years of the accumulation phase, income rises and investable assets begin to accumulate. Income generally continues to rise as the individual reaches peak productivity. If individual personal spending habits do not change, the gap between income and expenses may widen throughout the accumulation phase, allowing for an increase in savings. This phase is characterized by increased risk tolerance, driven by their increasing wealth and a still long term horizon.

Maintenance Phase

The individual has moved into the later years of life and usually has retired from daily employment or the pressures of owning a business. This phase focuses on maintaining the desired lifestyle and financial security. Preserving accumulated wealth begins to increase in importance, while the growth of wealth may begin to decline in importance. Risk tolerance will begin to decline, not only is the individual’s time horizon shortening but his confidence in the ability to replace capital or recover from losses is often diminished. In this stage investors typically reduce exposure to higher volatility asset classes and increase exposure to lower volatility investments.

Distribution phase

Accumulated wealth is transferred to other persons or entities. This phase begins when the individual is still reaping the benefits of the maintenance phase and retirement. Tax constraints becomes important as investors seek to maximize the after tax value of assets transferred to others. Although asset distribution may take place in the later stages of life, planning for such transfers can begin much earlier.

Although the progression from accumulation to distribution may be linear, it is not necessarily so. Individuals in the accumulation phase may become dissatisfied with a career choice and return to the foundation phase. Situational assessments allow investment advisors to quickly categorize potential clients and explore investment issues likely to be of greatest importance to them. Dynamic relationship exists among the above considerations. The value of situational paradigms therefore lies more in their general insights into human behavior and less in their ability to fully interpret individual circumstances. Investment advisors should emphasize the process of gathering and assessing relevant situational information rather than the specific category in which an individual investor may fall.

Investment Decision Making in Systematic Investment Plans

Sum evaluated how heuristics affect investment decision making in Systematic Investment Plans. 

Investors face two challenges: making good decisions and sticking to them. Most individuals do not make decisions in the rational, well informed and unbiased manner assumed by standard economic theory. There 

are bounds to human rationality, self control and self interest which can be explained as under:

Bounded rationality (Human problem solving abilities) Limits on time and intelligence means individuals cannot be expected to solve problems optimally. Experimental evidence suggests most people use rule of thumb (or heuristics) to cope with the limits of their abilities and these heuristics can in certain contexts lead to systematic errors in decision making.

Bounded Self Control: When the right thing to do is apparent, people may fail to do it for reasons of self control (most of us have eaten, drank or spent too much)

Bounded Selfish: Failure to pursue own self interest to the extent normally assumed of homo economics

Status Quo Bias in Decision Making: The option to do nothing or endorse a previous choice

Portfolio Diversification and Investor Perceptions of Risk

There is evidence that investors in SIPs often display attitudes to risk and portfolio construction that are at odds with accepted investment principles. I try and explain some of them as follows:

Myopic Loss Aversion: Seeking to avoid short term losses despite the long term horizon usually in planning for retirement. There is also evidence that the balance of funds on offer unduly influences individual’s choice of asset allocation in SIPs

1/n heuristic: Investors take the range of offer as implicit guidance from the investment vehicles as to the appropriate asset allocation strategy – a so called endorsement effect

Company stock ownership/ Investing in industry in which the investor in employed: One of the most worrying aspects is the high level of investment in own company stock / same industry amongst employees in SIPs. The strategy is dubious as the stock is correlated with the employee’s labor income and future employment prospects. It appears employees do not view their employers’ stock or the industry in which they are employed as risky. The example of Enron highlights this heuristic in investing. Majority of Enron employees invested their pension plans in Enron own stock. Thus when the company went bust, employees lost their jobs and their savings at the same time. Another theory that supports the above belief is that investors like to invest in familiar industries/ companies. There is also a home country bias linked to this theory.

The obvious solution to dealing with significant behavioral barriers to the effective use of SIP for retirement provision is to offer some form of education to participant; which brings to light two kings of investors:

Planners: Who take active interest in providing for their own retirement

Avoiders: Who are either intimidated by financial matters or are simply uninterested

Less attention can be given to those planners who will seek information anyways; in order to have impact on avoiders’ information should be straightforward

Stakeholders in the investment industry should encourage investor education not only in later but also in spirit. It is this lack of education which caused investors to build unrealistic expectations from equities while not weighing the inherent risk in them. The result is a flight of capital from equity markets of domestic individual investor. Wounds take long to heal especially those caused by bears and bulls. It’s about time the investment industry presents a similar flight of capital from SIPs caused by losses to investors who have made wrong pickings without adequately considering the risk/ return interplay.