At a time when wealth erosion is the norm, wealth managers who manage portfolios of HNIs (high net worth individuals) are having difficult days. Moreover, unlike the past, where HNIs were mostly wealth inheritors, today's HNI profile is a motley crowd comprising among others, wealth creators and professionals like engineers, doctors and lawyers. According to industry estimates, there are about 1.25 lakh families in India who have financial assets above of $1 million. An average portfolio of a HNI individual in India split into real estate (30%), equity (30%) and debt (30%). The remainder is mostly invested in fixed deposits and jewellery.
With the Sensex tanking and real estate prices showing substantial weakness, there has been tremendous wealth erosion , and consequently portfolios of many HNIs have been hit.
While all eyes are on wealth managers now, clients can't be completely absolved for the market mayhem. After all, the charging bull market of the past brought a change in the mindset of the investor who was mostly on a buy-sell mode. "One thing to remember about equities is that it should be treated as a long-term investment. If you invest in shares of a blue chip company with a 5 to 10-year frame in mind, the returns would be very high," says Madhubala Nahar, wealth specialist and managing partner, MBN & Co.
Fear is ruling the roost in the stock market at the moment and there are reports of HNIs strongly desiring to lower their exposure in equities. "Many individuals are keen to exit the stock market. I tell them this a bad time to redeem," says the wealth manager. Instead, he advises his clients to invest in debt products that offer higher yields. Equity isn't a bad word yet in the dictionary of wealth managers. "The market would start reviving sooner or later.
Therefore it is the best time to enter the market and invest in stocks of good performing companies.
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1 comment:
truly said...its high time investors invest in well performing companies..
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