How Vidya Bala Primeinvestor’s Manages Her Personal Finances

Vidya Bala, co-founder of Primeinvestor.in, says she and her colleagues have a penchant for investing directly in stocks but realize that mutual funds (MF) are a much better investment vehicle.

Primeinvestor.in, a Sebi-registered research analyst platform, offers recommendations on various personal finance products including stocks, MFs, G-Secs, ETFs, deposits, bonds, and insurance. The platform launched a little over two years ago, and now has around 4,000 subscribers. Bala says the platform selects stocks using a combination of growth, valuation and quality metrics and then applies corporate governance standards. “For MFIs, a set of metrics that includes consistency and captures both positive and negative aspects, and risk-adjusted returns and risks are taken into account.”

Bala was a qualified chartered accountant who, prior to launching Primeinvestor.in, analyzed funds and provided researched portfolios on FundsIndia, an online investment platform for microfinance institutions. Mint interacted with Bala about how she manages her personal investment portfolio and her views on different asset classes. Edited excerpts from an interview:

Do you invest directly in stocks or through mutual funds?

Each of us at Primeinvestor.in has a penchant for stocks, although we realize that MFs are way better. Over recent years, small mutual funds have become a larger part of my portfolio due to SIP (Systematic Investment Plan). In the case of stock picking, we try to time the market and invest a lump sum.

Do you take a “buy and forget” approach to stocks?

My colleagues and I think long-term but that doesn’t mean we buy and forget. We don’t really believe that coffee can make money. Even the best companies have a high growth phase and then a steady doubling phase and beyond, it may not give enough boost to the portfolio.

When were you first introduced to the equity asset class?

A relative of mine gifted stock to my parents at their wedding. Although my dad never owned any other stock, he showed us how the stock grew and how good it was a dividend-paying stock, supplementing his income stream. That stock is Amrutanjan, a very conservative and humble company based in South India. My father is no longer around but my mother continued to carry her.

Longest MF/Equity Investment You Have Made To Date?

I started my investment in MF with a tax savings fund. I’ve been keeping that for about 13 to 15 years now. It will be the longest equity investment for 18 years.

What do you think of real estate?

I have a very small exposure to real estate that I made very early on. Personally, I don’t think it was a good investment. In general, in India, rental returns are very low – between 1.5% and 3%. This does not make sense when there are other asset classes that can perform well.

What do you think of other asset classes like debt and gold?

I realized the importance of debt after 2008. It really highlighted the importance of asset allocation, when I saw my portfolio in the red after the 2008 crisis. Fortunately, we are now on the cusp of a growing story in the debt market. I think in the next decade, whether it’s the bond market or the debt ETF space, there’s going to be a lot of room for innovation.

When it comes to gold, it can be considered for diversification rather than reducing volatility in the portfolio.

How did your personal finances change after you became an entrepreneur?

Now that we’ve taken risks in our own business, there’s nothing more dangerous anymore. The job of an entrepreneur is very demanding, so the time one spends on one’s own portfolio goes down, as we tend to spend more time growing the company. So, turning into the passive was something I consciously saw in my own business.

Do you have insurance?

After completing my home loan, I didn’t find the need to get any life insurance. I feel my group is enough to take care of the lack of income if anything happens to me. However, I have a medical policy with adequate coverage.

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