Page 30 - Masala Lite Issue 163 July 2024
P. 30
30 CASH COURSE WITH ATUL
People want to know how much
money they can make, but
RED FLAGS it’s also important you make
sure you know how much you
may lose. Sometimes these
TO LOOK OUT investment products are marketed
as sophisticated. There are no
style points in investing. Warren
FOR AND Buffett is not known for his
sophistication and that is not a
requirement for any successful
AVOID WHEN investing.
What to be Wary of With Salespeople
INVESTING An easy way to tell if you need to be worried is to examine the behaviour of the person
trying to sell something to you. Being able to detect whether or not your interests are
at the forefront of the mind of the person across the table form you, will help you.
These are some questions you can ask yourself:
1. Are they transparent about how they get paid?
A Brief Summary:
2. Can they explain what they are selling you to a 5-year old? Can you explain it
• Heeding warning signs before making investment decisions can help you
avoid ugly situations. after they’ve explained it to you?
• The more complex an investment product is, the more chances are that 3. Are they trying to make guarantees? The future is uncertain and someone trying
things could go wrong. Make sure you know how much can be lost before to tell you otherwise is trying to profit from it.
considering how high it can go. The opposite is true: when salespeople do not
do these things, they may be able to help you.
• If someone is selling you something, paying attention to how they sell will
help you quickly learn a lot about them. If they cannot explain clearly what Know What You Like and Kill the Rest
is being sold, run.
You can apply this concept a step further and
• Develop your own criteria for decisions you need to make. Doing so may help make criteria for what you will not consider. The
to simplify this part of your life.box] process of elimination can be even more useful
than finding the needle in the haystack. Put in the
Lots of poor investment results have similarities. In some of these cases, pain can work up front to figure out what is appropriate;
be avoided if the investor is a little discerning. If you have criteria that’ll help you you can then discard everything that does not
look out for red flags, ugly surprises may be dodged. Here are examples of some red meet your requirements. Atul Sethi is the founder
flags you can look out for: If you purchase Thai tax-savings mutual funds and CEO of Farnam Tree, a
licensed boutique investment
(RMF/SSF/Thai ESG), excluding funds that charge
More Complicated Means More Room for Error firm based in Bangkok. Atul has
you high fees can help you. When you purchase
The more complex an investment product is, the higher the chances of extreme these funds or look through a selection online, over twelve years’ experience
results. If all goes well, you may make a lot of money. If things do not go well, you exclude funds with an expense ratio of 1.5 percent working in investment banking
may be left with very little. Often, investors are not aware of this when putting their per annum, and apply filters to bring down your and as a research analyst, prior
money at stake. If the price of your investment is linked to the price of something selection pool. to starting Farnam Tree.
else, this is a sign of such a situation.
MASAL A LITE ISSUE 163 - JULY 2024
