1. Perspectives on Investing
WHAT REALLY MATTERS 1
Perspectives on Investing

2. Some questions we will try to address today3
Some questions we will try to address today
What, when,
how do I buy
financial
products?
What are the
factors that
determine
Are market levels
relevant??
What is better:
buy and hold or
trade?
returns?
I always seem to buy when the
market has peaked, is there a better
way?

3. Are you Saving or are you Investing?

4. Profession vs. Investments5
Profession vs. Investments
PROFESSION
INVESTMENTS
INCOME
CREATION/
NURTURE/
ACCUMULATION
PRESERVATION
OF WEALTH
OF WEALTH

5. Profession vs. Investments6
Profession vs. Investments
PROFESSION
INVESTMENTS
INCOME
TRUST YOUR
YOU KNOW
ADVISOR TO
BEST
KNOW BEST

6. Consider the rising cost of living!7
Consider the rising cost of living!

7. Planning a wedding today
RISING COST OF LIVING 8
Planning a wedding today
Wedding at the Taj
Guests :
Price per plate:
Decoration:
Other Expenses / Gifts, etc:
500
Rs. 2,000
Rs. 10,00,000
Rs. 15,00,000
Total Expenses
Rs. 35,00,000

8. Planning a wedding for your child in 20 years
RISING COST OF LIVING 9
Planning a wedding for your child in 20 years
Wedding at the Taj
Guests :
Price per plate:
Decoration:
Other Expenses / Gifts, etc:
500
Rs. 6,414
Rs. 32,07,135
Rs. 48,10,703
Total Expenses
Rs. 1,12,24,838
Assuming 6% for 20 years

9. Household expenses are on the rise
RISING COST OF LIVING 10
Household expenses are on the rise
Inflation will further shrink your buying power!
A Loaf of Bread
1 Liter Carton Milk
1 Kg Apples
Year
2000
2010
2020*
2030*
Amount
Rs. 10
Rs. 16
Rs. 29
Rs. 51
Year
2000
2010
2020*
2030*
Amount
Rs. 25
Rs. 40
Rs. 72
Rs. 128
Year
2000
2010
2020*
2030*
Amount
Rs. 25
Rs. 80
Rs. 143
Rs. 257
Assuming 6% for years 2020 and 2030

10. Yesterday’s luxuries are becoming today’s necessities
RISING COST OF LIVING 11
Yesterday’s luxuries are becoming today’s necessities
Products previously thought as luxuries are the norm today

11. Our life cycle: Focused on meeting current needs only
RISING COST OF LIVING 12
Our life cycle: Focused on meeting current needs only
Can we ignore planning for the future?
Retirement
Child 2’s
Marriage
Child 1’s
House
Incom e
Child 2
College
Child 1’s
College
Child 1
Car
Marriage
Birth and
Education 25
Working Life 60
Retired Life
75 +
Age

12. Failing to plan today is as good as planning to fail in the future!13
Failing to plan today is as good as
planning to fail in the future!

13. What typically drives us to invest?14
What typically drives us to invest?
Greed / Fear?
News, hot tips, gut feeling?
Macro-economic or global scenario?
Political environment?
Should these
be the main
motivators to
invest?

14. Creating long term wealth: What really matters?15
Creating long term wealth: What really matters?
5% of the return
– Relative performance of selected funds
95% of the return
– Asset Allocation
– Ability to handle emotional & financial stress
– Monitoring and tracking your portfolio periodically

15. Importance of Asset Allocation16
Importance of Asset Allocation

16. ASSET ALLOCATION 17
Asset Allocation
 Diversifies your investments across asset classes like equities /
stocks, bonds / debt, cash, real estate, etc
 A common sense investment strategy
 Tailored to your needs and goals
ASSET
ALLOCATION
FINANCIAL
GOALS
RISK PROFILE

17. Benefits of Asset Allocation18
Benefits of Asset Allocation
 May reduce overall risk
 May improve your chances to earn more consistent returns over time
 Helps keep you focused on your goals

18. Asset Allocation: Need based strategy19
Asset Allocation: Need based strategy
Capital Growth
Risk: Medium to High
Period: 3 to 5 years
Income
Risk: Medium to Low
Stocks
Growth
Funds
Bonds
Debentures
Period: 1 to 3 years
Income/Bond Funds
Company Fixed Deposits
Capital Preservation
Money Market Funds
Short-term deposits / Government Paper
Risk: Low to Medium
Period: Less than 1 year

19. Asset Allocation: Age based strategy20
ASSET ALLOCATION 21
Asset Allocation: Age based strategy
Age Group 25-40
10.00%
Age Group 41-50
15.00%
Growth (Equity)
Income (Bonds)
Growth (Equity)
Income (Bonds)
15.00%
Liquidity (Banks)
35.00%
Liquidity (Banks)
50.00%
Age Group Above 60 yrs
75.00%
Age Group 51-60
20.00%
35.00%
25.00%
Income (Bonds)
Growth (Equity)
Liquidity (Banks)
Income (Bonds)
Growth (Equity)
Liquidity (Banks)
45.00%
50.00%
The above are only hypothetical examples and are not necessarily indicative of the strategies to follow for the age groups
mentioned above

20. Making asset allocation work21
Making asset allocation work
Periodic Rebalancing
Rebalancing helps investors enter equities at ‘lows’ and exit at
‘highs’ without having to ‘time’ the market
EXAMPLE
Equity Funds
Income Funds
Profile & objective based allocation
70%
30%
Bull Market fluctuation
80%
20%
Rebalance
EXAMPLE
Equity Funds
Income Funds
Profile & objective based allocation
70%
30%
Bull Market fluctuation
80%
20%
Rebalance

21. Making asset allocation work22
Making asset allocation work
Periodic Review
Periodic review of objectives can ensure an investor is not left at the
vagaries of equity markets when he needs his money

22. Creating long-term wealth: What really matters?23
Creating long-term wealth:
What really matters?

23. Where you invest Equities can outperform other asset classes over time
WHAT REALLY MATTERS 24
Where you invest
Equities can outperform other asset classes over time
Average inflation figures for the past 5, 10 & 15 years were 5.29%, 5.03% & 4.98% respectively
As of 31 March, *Compounded Annualized Growth Rate (CAGR), Gold Data: International Spot Gold Prices;
# Average of 10yr GOI yield to maturity, N.A.: Not Available. FD rate shown above is rate effective from for
deposits below Rs. 1 crore as offered by State Bank of India (Source: Bank Fixed Deposits are
relatively safer as they are covered under Deposit Insurance and Credit Guarantee Corporation of India to the extent of
Rs. 1 lakh per account. GOI bond offers fixed and assured returns.
Source: BSE, Newswire18. Past performance may or may not be sustained in future.

24. 25
When you invest
Consider the case of Franklin India Bluechip Fund (FIBCF)
 Over the 17 period December – March , spanning 4186 business
days, Franklin India Bluechip Fund grew at an annualized rate of 25.67% p.a.
 If in the process of timing, an investor had been out of the market on the 10 best
days, his returns would be 4.89%.
 Staying out on the 30 best days, his returns would be 1.86%.
Past performance may or may not be sustained in future. Returns of FIBCF and
benchmark (BSE Sensex): 1 yr, 3 yr, 5 yr , since inception: FIBCF: 12.77%, 14.20%,
14.38%, %; BSE Sensex: %, 7.52%, %, %. Returns are
compounded and annualized based on 31 Mar Growth Plan NAV of Rs.
Inception Date: 01 Dec The scheme became open-ended in Jan
1997. Dividends are assumed to be reinvested and bonus has been adjusted. Load is
not taken into consideration.

25. When you invest Stayed fully invested, your returns would be:
WHAT REALLY MATTERS 26
When you invest
Take another example, the BSE Sensex
For the 20 year period ended March if you had:
Stayed fully invested, your returns would be:
Missed the 10 best days, your returns would be:
Missed the 20 best days, your returns would be:
Missed the 30 best days, your returns would be:
Missed the 40 best days, your returns would be:
15.10%
9.23%
5.68%
2.75%
0.02%
The example given above is purely hypothetical and illustrative only since one
cannot invest directly in the BSE Sensex. Past performance may or may not be
sustained in future.

26. WHAT REALLY MATTERS 27
When you invest
Points to ponder
Perfect market timing requires one to get two things right: the right exit
point and the right re-entry point
Getting even one of these wrong can affect one’s returns
Mathematically, the odds are heavily against one being able to
perfectly time the market
The probability of getting the timing right is 0.23%*
So what’s a better way to invest?
* 10 best days from 4186 as shown in the example of FIBFC

27. Not market timing but time in the market matters!
WHAT REALLY MATTERS 28
Not market timing but time in the market matters!
Consider the example of Franklin India Bluechip Fund, a fund
with a 17 year track record across market cycles
Assumed Rs invested at Inception in FIBCF and BSE Sensex. Past performance may or
may not be sustained in future. Dividends are assumed to be reinvested and Bonus is adjusted.
Load is not taken into consideration. Period: Since Inception (01 Dec 1993) to 31 March 2011

28. Possibility of Staying invested helps!29
Staying invested helps!
While equities may be volatile in the short-term, over the
long term, the probability of loss decreases. Consider the
example of FIBCF
Past performance may or may not be sustained in future. Annualized Compounded returns based on
Growth Plan NAVs. Period - Inception date to 31 March 2011; BSE Sensex rolling returns for the same
period: Maximum returns, Minimum returns, Average returns, Possibility of making money, Possibility of
losing money: 1 Year: %, %, 14.93%, 62.24%, 37.76%; 3 Year: 62.30%, %, 11.98%,
71.90%, 28.10%; 5 Year: 47.22%, -7.81%, 12.91%, 80.67%, 19.33%; 10 Year: 19.85%, 0.92%, 11.80%,
100.00%, 0.00%. Sales load has not been taken into consideration. Dividend/Bonus are adjusted. Inception
Date: 01 December 1993.
Over a 5 year horizon, investors have made money!
Maximum
Returns
Minimum
Average
Possibility of
Making Money
Losing Money
1 Year
199.42%
-50.60%
31.86%
75.72%
24.28%
3 Year
79.75%
-9.57%
26.89%
88.63%
11.37%
5 Year
56.08%
9.66%
28.81%
100.00%
0.00%
10 Year
40.19%
19.47%
28.42%
Maximum
Returns
Minimum
Average
Possibility of
Making Money
Losing Money
1 Year
199.42%
-50.60%
31.86%
75.72%
24.28%
3 Year
79.75%
-9.57%
26.89%
88.63%
11.37%
5 Year
56.08%
9.66%
28.81%
100.00%
0.00%
10 Year
40.19%
19.47%
28.42%

29. How you invest Cycle of market emotions should not rule you…
WHAT REALLY MATTERS 30
How you invest
Cycle of market emotions should not rule you…
“Has been one of my best
EXUBERANCE
investment decisions…"
"Markets are on a roll…"
"Should be a temporary
EXCITEMENT
correction"
"I can withstand this, things
should turn around…"
"I've finally recovered my
principal. But should I exit
now?"
RELIEF
ANXIETY
"Should I have exited when I
was making money"
"Once I recover my principal
I'll exit"
FEAR
"Will the market ever go up?"
"How long will this correction
last?"
HOPE
PANIC
There is often no relationship between performance of a fund
and an investor’s performance
RELIEF

30. When you start Starting early can make a difference to your wealth
WHAT REALLY MATTERS 31
When you start
Starting early can make a difference to your wealth
Gita, Age 30
Sita, Age 40
So what do you think is their
retirement corpus at age 60
assuming a return of 10%
annually on their investments?
10,000 p.m
Rs lacs
Rs Crores

31. What are the returns you earn
WHAT REALLY MATTERS 32
What are the returns you earn
The returns you earn over time can make a difference
Rs.4.97 Crores
Rs Crores
Rs Crores 8%
12%
15%
Value at age 60 of Rs. 100,000 invested every year at age 30 upto 58
at different rates of returns

32. What is a Systematic Investment Plan (SIP)?33
What is a Systematic Investment Plan (SIP)?
 The term “systematic investing” applies to the process of investing
regularly i.e. at fixed intervals, say monthly or quarterly
 Why invest systematically?
– Most of us get a monthly remuneration or salary
– Most of us pay monthly EMIs on a car, house, etc
– Isn’t it obvious we should also invest monthly?

33.  Rupee Cost Averaging Two basic principles on which SIP works
SYSTEMATIC INVESTMENT PLAN 34
Two basic principles on which SIP works
 Power of Compounding
 Rupee Cost Averaging

34. Rupee Cost Averaging at work
SYSTEMATIC INVESTMENT PLAN 35
Rupee Cost Averaging at work
NAV = 12.00
Units = 83.3
NAV = 10.0
Units = 100
NAV = 10.0
Units = 100
1-Jan-10
1-Feb-10
1-Mar-10
1-Apr-10
1-May-10
NAV = 8.0
Units = 125
Average Price per unit: Rs
Average Cost per unit : Rs. 9.79
Assume Rs. 1,000 invested per month

35. SYSTEMATIC INVESTMENT PLAN36
How SIP has worked
If you had invested Rs. 1,00,000 every month through an SIP
in FIBCF, it would have grown to:
Past performance may or may not be sustained in future. Annualized and compounded returns based on 31
March 2011 Growth Plan NAV of Load is not taken into consideration. Dividends assumed to be
reinvested and Bonus adjusted. *The scheme became open end in January Monthly investment of
equal amounts invested on the 1st day of every month has been considered. Inception Date: 01 December
1993.
Rs. 1,00,000 per Month over
FIBCF
BSE Sensex
Rs.
CAGR
1 year (Rs. 12,00,000)
12,65,300
10.30%
12,61,000
9.61%
3 years (Rs. 36,00,000)
51,82,800
25.22%
47,93,400
19.56%
5 years (Rs. 60,00,000)
91,52,800
16.94%
81,57,500
12.26%
7 years (Rs. 84,00,000)
1,74,01,600
20.46%
1,52,06,000
16.67%
10 years (Rs. 1,20,00,000)
5,06,37,900
27.14%
3,51,13,300
20.37%
Since Jan 97* (Rs. 1,71,00,000)
15,84,36,200
27.83%
6,09,01,600
16.32%
Rs. 1,00,000 per Month over
FIBCF
BSE Sensex
Rs.
CAGR
1 year (Rs. 12,00,000)
12,65,300
10.30%
12,61,000
9.61%
3 years (Rs. 36,00,000)
51,82,800
25.22%
47,93,400
19.56%
5 years (Rs. 60,00,000)
91,52,800
16.94%
81,57,500
12.26%
7 years (Rs. 84,00,000)
1,74,01,600
20.46%
1,52,06,000
16.67%
10 years (Rs. 1,20,00,000)
5,06,37,900
27.14%
3,51,13,300
20.37%
Since Jan 97* (Rs. 1,71,00,000)
15,84,36,200
27.83%
6,09,01,600
16.32%

36. To put it in perspective37
To put it in perspective
Where you invest: Equities can outperform other asset classes over
time
When you invest: Time in the market and not market timing matters!
How you invest: Avoid market emotions and market noise
When you start: Starting early can help in the long-run
What are the returns you earn: A small difference over the long term
can make the difference to your overall corpus

37. 43
A word on risk…

38. We all view risks in our own way44
We all view risks in our own way
There is a risk to investing
There is a risk to not investing, as well
There is a risk to investing in equities
There is a risk to not investing in equities, as well
There is no such thing as a ‘risk-free’ investment
It is important that you are comfortable with the risks
associated with whatever investment avenue you choose
Here’s wishing you all success in investing!

39. 53
Thank You