Choose experts not astrologers.
Sajjad Bazaz
Let me begin with one of the beautiful motivational quotes about money management: “Money is multiplied in practical value depending on the number of W’s you control in your life- what you do, when you do it, where you do it, and with whom you do it.”
So, it’s the level of control over your money which will describe your financial health.
In the present times, saving the right amount of money alone does not matter, but choosing the right investment option cannot be ignored to ensure that your savings multiply more efficiently. In other words, it’s saving right amount of money coupled with the right mode of investment which can help you to draw a balance between your present and future needs.
I am sure, as far as the investment part is concerned, every one of us gives due thought to choose the right kind of option with safety of funds as the priority. At the same time, return on investment also occupies our mind and for higher returns we are ready to sacrifice a portion of safety to return on investment. Amid this scenario, investors, particularly common retail investors toil here and there to ensure a safe investment route.
Interestingly, astrology has been a longstanding route for many investors who bank upon it to invest in various financial instruments. This scenario paved a path to soothsayers into the financial markets.
In the context of soothsayers, many call them ‘voodoo scientists’, let me share a short story.
Some time back, one of my acquaintances narrated an abrupt behavioural change in his 15-year-old son. A parrot astrologer on the roadside had done the trick. His son had spotted a ‘fortune-teller’ with a caged rose-ringed parrot. When he was told that the parrot predicted the future by picking ‘perfect’ postcards, the boy wanted to know what was in store for him. The card picked by the parrot contained a narration which praised his ability to become a great man if he seriously pursues his studies. Since that day, the boy has shunned his naughty activities and is trying to show maturity even in his routine activities.
Let me not debate how accurate the parrot astrology is, but one thing is certain that a prediction by a fortune-teller or a soothsayer leaves a magical impact on a person. Today, the parrot astrology is almost out of the scene, as use of information technology tools has virtually turned it into a science. A most sophisticated chain of offices exist today exclusively dedicated to fortune-telling.
It’s a long-established fact that human beings have always shown keen interest to know their future. This is how soothsayers emerged on the scene.
Notably, millions of people – from those about to plunge into matrimony to those seeking political office to those about to launch business projects – seek advice from professional fortune tellers. In the world of financial markets, these professional soothsayers make hay while a huge number of investors, be it individuals, groups, companies or corporates, bank upon their advice, particularly for investment in stock markets.
In investment matters we have two key players who can predict the future of stocks and the related markets. We have fundamental analysts who focus on financials, policy decisions, company/sector-wide developments and so on to analyse the future movement of the markets. While the soothsayers dish out their predictions on birth charts and correlations between stock prices and planetary movements, combination of numerology, tarot cards and horoscopes among other things.
There are professional investors who attribute the success of their investment decisions to the art of using a mix of astrology and technical analysis before handling any financial matter. Mostly, they first see what astrology has to say, and then look at the technical side to make investment decisions. But what is interesting to note is that most of them claim experiencing more accuracy in the prediction of soothsayers as, according to them, astrologers are generally right about market movements, especially the timing of the fall or rise of the market is as accurate as 95 per cent.
Here I am reminded of the technical analysis tools known as Gann angles. William Delbert Gann is founder of this technique and is supposed to have used astrology to forecast stock prices as far back as the 1920s. Gann angles are widely used by traders even today. Today we have a huge network of these astro-economists who have assembled at the World Conference of astro-economics since 1988 to discuss the impact of star alignments on stock markets and the economy.
Meanwhile, the financial market is flooded with varied financial instruments and it is impossible for an individual to understand everything that is available for them. In this crowd of financial instruments, individuals cannot pick what is best for them and it’s only a good financial advisor who can help an investor to put the right investments in place, not an astrologer.
Since financial markets are unpredictable, we cannot say financial advisors will give foolproof advice. However, his advice based on your particular situation and goals can help you to minimize financial risks. To get maximum out of your financial advisor, you have to at least let him know about your level of conservativeness and your appetite for risk.
Precisely, you have to make your financial advisor understand you better so that his financial plan for you includes a diversified portfolio of various instruments to meet your goals. It’s the financial advisor who will help you to strike a balance by making you aware of various options.
However, engaging a financial advisor doesn’t leave you to remain aloof from your investment portfolio. Once you are on board with a financial advisor and your portfolio is put together, you need to monitor that portfolio. You should have a regular performance review of your investment portfolio with your financial advisor. Don’t forget to update your advisor about any life situation change which you may undergo at any point of time.
The bottom line is that the basic aim of every investor is to see their assets grow over time. As far as managing money is concerned, you can certainly go for it all alone. Doing it yourself is, of course, a brilliant idea, but mastering money management skills especially vis-à-vis stock market requires intensive research and learning. Day by day, as you get busier, your financial goals get more complicated. It’s here that a financial consultant’s role emerges and he can help you to remain disciplined about your financial strategies. However, asking him questions and following his advice will surely not only lead to growth in your investment but also help to minimize your risk in the event of any perfect storm situation.
In other words, a financial advisor is like a medical doctor for an investor.
And remember, a stock broker is not a financial advisor, even though he may be sharing some investment tips with you.
Meanwhile we have a long standing history of this type of voodoo science with its countless entertaining accounts. We ascribe its prevalence to the way we are primed to detect patterns and then form hypotheses based upon them. Emotional events may result in hypotheses being felt to be irrefutably correct, so that we become very reluctant to abandon them even in the face of clear contrary evidence. Do you think this is a bad science for the purposes of fraud?
Sajjad Bazaz heads Internal Communication Department of Jammu & Kashmir Bank Ltd. The views expressed are his own and not of the institution he works for.
