The Bard of Avon made these lines famous in his play, ‘As You Like It’. The speech which follows the title has become memorable because of its relevance even today. For our reference we will only see the first four lines:
“All the world’s a stage,
And all the men and women merely players;
They have their exits and their entrances,
And one man in his time plays many parts.”
Let’s take these lines as an analogy, to the modern world of finance. You’re at a stage in life where, you have to choose your story. You make choices about managing your money, you invest, you exit your investments. You even choose financial products, based on your role in life. Your choices when you’re young, will vastly differ from the ones you make later. Now, we can’t predict what product you’ll choose, but we can group you based on your habit or persona. Simply put, investors are like stage characters, each persona will choose, based on his/her broader persona type.
To make this a more entertaining read, let’s see if you can match your personality, with these theatre characters:
Rosalind-As You Like It:
Shakespeare could not have written a more complex character. Even today, Rosalind is seen as combination of charm, quick-wittedness, boldness and the acumen to pull off a male disguise. Throughout the play, she switches between being the gentle Rosalind and her masculine avatar as Ganymede. The character symbolises a stand-apart and highly imaginative personality.
If you’re ‘Rosalind’, you’ll prefer mutual fund investments, which tend to have a good balance between risk & returns. You could opt for Hybrid, or, Balanced mutual funds, which comprise of debt- and equity-oriented, underlying securities. These are considered safer than pure equity instruments and yet, you can expect returns higher than pure debt instruments.
Vladimir-Waiting for Godot:
For those who’ve read or seen this play by Samuel Beckett, you’ll probably agree with literary critic Vivian Mercier. It’s one where nothing happens yet, you’re always wondering…”What next?”. Vladimir’s character in this play, symbolises intelligence, maturity and responsibility. Throughout the play, he’s the patient one, always reminding his restless companion Estragon that they must ‘Wait for Godot’.
If you have Vladimir’s characteristics, equity Mutual Funds like Large Cap funds. These are equity-oriented mutual funds, which comprise of the top 50 stocks by market capitalisation, listed on stock exchanges of India. You need to be patient when holding an investment in these funds. Over 5 years, these funds can potentially give you superior returns net of taxation and inflation.
One of the most frightening, yet, remarkable characters penned by Shakespeare. Lady Macbeth is head-strong, ambitious, is willing to take risks and knows the consequences. Throughout the play, she would strategise each move, and look for opportunities where none existed.
Investments in Mid-Cap mutual funds is what you’ll be looking for. These funds are extremely risky but can potentially offer great returns in over 5 years. You need a moderate to high capacity for risk, and the acumen to make calculated investment decisions, when investing in these funds.
Torvald—A Doll’s House:
Appearances can be deceptive and Torvald’s character in Henrik Ibsen’s play, is apt. On the face of it, you think he’s the ideal husband and family man. As you read on, you realise, he has a weak character and is more worried about his reputation in society.
We left this character for last because, people like Torvald, are usually flippant. They keep putting off investing because they prefer living lavishly for the moment. When it comes to saving taxes, they tend to make hasty investment decisions, based on popular opinion. These usually are not the right choices and are marked with short-sighted horizons.
If your investment persona is a lot like Torvald, you may want to reconsider your life choices. Investment planning is a long-term process; it not only compounds wealth, but also secures your future.
Before you invest…
It’s important to keep in mind your risk appetite before investing. Your risk appetite is a measure of the amount of risk you are willing to take for potential gains. Some people have a high-risk appetite and are willing to accept the possibility of losing a significant part, or all of what they have invested, for potentially higher returns. There are also people who are unwilling to risk even a single Rupee on an investment – it’s more crucial to them to protect their wealth, than to grow it.
When investing, it is important to select investment products that match your risk appetite. You can understand your risk appetite by completing the Risk Profile Assessment questionnaire on the Digibank app. The app is also designed to alert you in case you choose a Mutual Fund which is not matching with your chosen risk profile.
DBS Bank offers Mutual Funds that are instant, paperless, signatureless – even transaction fee-less! What’s more? You get to choose from 250+ Mutual Funds across 15 top-performing asset management companies. So why wait? Login to digibank (app or internet banking) and start investing in a flash with instant Mutual Funds on DBS Bank.
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Mutual Fund investments are subject to market risks, read all scheme related documents carefully before investing.