One of the seasoned investor on twitter posted this.....

"When someone sees your kid after a long time they say - oh how big he/she has become!!
But, u don't notice any change since u see your child every day.

Similarly, stop watching prices daily and give yourself the chance to tell your stock - Oh my God.....how big you've become!"

As usual follower started commenting on it and following are the comments raised by them.

- What is the chance of a kid not growing? Is the probability of a kid growing and stock performing comparable?

- Sometimes...If you don't follow the stock prices, then one fine day you will find that the share price had gone down and you were caught unaware..Some NBFC shares are good example for that...

- Kids grow always as that's the rule of nature but stocks don't always go in one direction.

- Ok sir today u tell me the name of a kid which I will buy and see it again when he becomes a man

If you notice, here most of them are focusing on "what-if" side of an investment, as if it is easy to act when a stock is not performing or falling down. Believe me, most of the time you can't do anything when stock start falling because stock never moves in straight line and even if it falls, what is the guarantee that it is collapse not correction? Most of the investor get frozen under such circumstances and when they act, they act during wrong time. Investor in his tweet want to convey one very important message to investment community which is - "being in-activity" or "have patience" or "staying long enough to create wealth", which is even conveyed by Buffett, "Growing rich, slowly". A real financial advisor's duty is also to educate investor to have patience & think long term.

Many new investors think that our job is to find the best investments and we think that our job is tofocus on educating investor & to get the asset allocation (between various assets such as equity, debt, real estate etc) right. For most of the investors, conversations are always about upcoming financial goals, surplus available to be deployed, past real returns and likely future returns, never about the best fund or investment. Less time chasing the best fund and even lesser time discussing direction of markets.Our discussion mostly revolves around understanding the market dynamic and positioning ourselves to maximise the returns by prudent capital allocation among best in class stable businesses with honest & capable management in place.

So, firstly I feel that  an advisors real job is asset allocation, not bringing you the "best" investment option (which is secondary). No one can with any accuracy say which asset / fund / stock will do the best year on year.Secondly and even most importantly the advisors job is to stand between the investor and his worst financial mistake. I remember a guy who had bought a large flat in suburb few years back, now after almost 5 years he is paying the large EMI but receiving a small rent if he is lucky as most of the time the flat is empty. He can neither sell this now as there are at few hundred unsold apartments in the complex. So, he is stuck paying large EMIs for next 15 years or so and get small rents in the meantime and hope for some good time to sell it off.

A retired librarian who went to bank to renew FDs was sold pension plans and other policies instead with lock in ranging from 5-20 years! Many of these investors though affluent lack a financial advisor and do piecemeal investing, they have a broker for real estate, some agent for PPF, banker for investments etc with the result that after some time, they don't have a clear picture. They don't have an advisor but a salesman for each product. Imagine if both had taken some good financial advice, A real financial advisors job is to get your asset allocation right and stop you from making bad financial decisions that can't be undone for decades!

Yes we are all biased in one way or another but at least the bias of a financial advisor / planner is lower as client interest comes first and product sales is after that. A good advisor / planner will actively dissuade a client from bad investments. Have a good advisor to get your asset allocation right, more importantly to stop you from bad financial decisions. If someone says he can get you the best investment year on year or makes some tall claims be rest assured that he is not likely to be a good advisor!

Regards

CA. Binoy J. Kattadiyil