मूढ़ मूढ़ाए हरि मिले, हर कोई लेओ मुड़ाये
बार बार के मूढ़ से, भेड़ ना बैकुंठ जाये.

Herd Mentality: Generally whilst taking any investment decision people tend to follow herd. Kabir says, if by shaving head one could attain moksha then the sheep should be the first one to attain moksha but it doesn’t happen. Similarly before taking decision on investments one must consider the need, risk apetite, goals, liquidity etc. Following the herd is not a good idea.

This is the most common and biggest mistake people make while investing. While following the herd they end up burning their hands. Normally small/retail investors enter the market when it would had already peaked out. The recent example is bitcoin, where max people invested at the top and within a year it crashed by more than 50 percent.

पावस देखि रहीम मन, कोइल साधे मौन ।
अब दादुर वक्ता भये, हमको पूछत कौन ।।

When the market is on upswing i.e. when everybody on the street is over optimistic you will find many so called experts shouting from the roof top giving investment ideas. People send TIPS on sms,emails etc. They try to encash on the greed of the investors. And people who fall into such trap don’t like to listen to people who talk about logical way of investing, asset allocation, goal planning etc. because there is a mad rush to make quick buck. Just like in the rains one can hear only frog making noise and no one remembers cuckoos voice.

सर सूखे पंछी उड़े ,और सरन समाही ।
दीन मीन बिन पंख के ,कहु रहीम कहाँ जाई ।।

It is a typical situation of retail investor when she realizes that the investments which she had made at the top of the market, value of that has nosedived and she finds herself helpless and forced to stay in expectation that it will bounce back. Such situation arises when institutional investors, FIIs, promoters of the company move out to explore better opportunities elsewhere and retail investors feel left behind as usually they enter into market looking at others, its like the situation of that fish where she swims and ponds have dried up. Birds who used to drink water have flown to other ponds and the fish is left to her destiny.

साधू ऐसा चाहिए,जाका पूरा मंग
विपत्ति पड़े छाड़े नहीं, चढ़े चौगुना रंग

A good financial advisor doesn’t only manages the money of the investor but also manages the emotions of the investors. What kind of advisor an investor needs? One who does the hand holding of the investor in tough emotional and financial situations. Also financial advisor needs to be more engaged with the investor during tough times. The efforts from the advisor should be four times of normal days during bad times.

ज्यों नैनन में पूतली, त्यों मालिक घर माहि
मूर्ख लोग ना जानिये ,बाहर ढूँढत जाई

Data is the new oil. For advisors understanding their database is the key. It helps in knowing the clients better which helps in cross selling and up selling. Often advisors ignore the low hanging fruits which are in their database and go out in search of new acquisition. This exercise can get them higher share of wallet.

पत्थर पूजन सब करें, पत्थर पूजन जाये
घर की चाकी ना पूजि, जामे पीसो खाए

Often advisors track markets through different media vehicles, instead of engaging with the clients. Utilising one’s time effectively is the key to have better customer engagement, means more business, more references, better customer experience.