Learning from Others' Mistakes: The Smart Way to Invest
Learning from Others' Mistakes: The Smart Way to Invest
Most of us are wired to chase success stories in investing. We eagerly read stories of legendary investors and their incredible successes, hoping to replicate their magic. But here's a secret: the real investment superpower isn't just knowing what to do, it's knowing what not to do.
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Many investors wait for the "perfect" time to invest. They enter late when markets are at high and exit fast when they are at low. Result? Missed opportunities and average returns.

Lesson: Time in the market beats timing the market. Start early. Stay consistent. Use SIPs (Systematic Investment Plans) to smooth out volatility and build long-term wealth.
Remember the crypto hype? The meme stock frenzy? Many jumped in without research-only to exit with losses. Herd mentality often leads to regret.

Lesson: Trends fade. Fundamentals last. Do your homework. Invest based on needs, risk profile, and time horizon-not headlines.
Too many investors bet heavily on one stock, sector, or trend. If it tanks, the entire portfolio takes a hit. Example: In the early 2000s, tech investors who held only dot-com stocks lost everything when the bubble burst. Diversified portfolios weathered the storm much better.

Lesson: Don't put all your eggs in one basket. Spread your investments across equity, debt, gold, and other asset classes. Diversification cushions your risk.
Markets rise and fall-it's their nature. But impulsive reactions to volatility can derail even the best portfolios. Investors who exited during COVID-19 market crashes in March 2020 missed out on one of the fastest recoveries in market history.

Lesson: Patience pays more than panic. Stay calm, stay invested, and stick to your investment strategy.
Many people invest randomly-with no objective in mind. Retirement? Child's education? Wealth building? If you don't know your destination, how will you measure progress?

Lesson: Investing without an objective is like sailing without a compass. Define clear needs. Strategize your investments accordingly. Review regularly with a mutual fund distributor.

The above mistakes have wiped out more wealth than any single successful stock pick has ever created. Yet, because they're less glamorous, they receive far less attention.

Learning from other people's mistakes is often easier than trying to copy their successes. You learn to anticipate what might go wrong and then set up ways to protect yourself from common mistakes.
Smart investing isn't just about picking winners-it's about avoiding costly errors. And the best part? You don't have to make the mistakes yourself.

Every mistake, every crash, every bad decision made by someone else is a lesson freely available to you.

So remember:

Invest with insight. Learn from the past. And let other people's mistakes be the stepping stones to your financial success.
NJ E-wealth
Emergency Fund: Your Financial Safety Net
Emergency Fund: Your Financial Safety Net
We all dream of building wealth, seeing our investments grow, and achieving financial freedom. But often, in our pursuit of big returns, we overlook a critical foundation: the emergency fund. This isn't just a "nice to have"; it's your financial airbag, your superhero cape in times of crisis, and ultimately, a cornerstone of a robust investment strategy.
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Think of it as your financial airbag. It doesn't make your journey smoother, but it saves you when life hits a pothole - like job loss, medical emergencies, major repairs, or even unplanned travel. Unlike your regular investment for different needs, this fund is dedicated solely to emergencies, ensuring you don't have to derail your long-term financial needs when an unforeseen event strikes.
Without an emergency fund, here's what often happens:
This is perhaps the most damaging. You're compelled to liquidate your investments, often at an inopportune time. This not only disrupts your long-term wealth building but can also lock in losses, especially if markets are down.
Credit cards become the default, leading to a spiral of high-interest payments that eat into your future earnings and make recovery even harder.
Financial anxiety leads to impulsive choices: early withdrawals, panic selling, or over-borrowing - all because you lacked a simple safety net.
Your dreams of a down payment for a home, a child's education, or a comfortable retirement get pushed further and further away.
In essence, not having an emergency fund is like building a skyscraper on quicksand. One unexpected tremor and the whole structure is at risk.
The general rule of thumb is to have 3 to 6 months' worth of essential living expenses saved in your emergency fund. However, the ideal amount can vary based on your personal circumstances:
If you have a highly stable job, you might lean towards 3 months. If your income is less predictable or your industry is volatile, aim for 6 months or more.
More dependents mean higher expenses, necessitating a larger fund.
If you or a family member have pre-existing health conditions, a larger medical emergency buffer might be wise.
If you have significant debt (e.g., car loan, personal loan), a larger fund can provide more breathing room.
Calculate your essential expenses like rent/mortgage, utilities, groceries, transportation, and insurance premiums. Don't include discretionary spending like dining out or entertainment.
Building an emergency fund requires discipline and a strategic approach:
Based on the points discussed above, determine your target emergency fund amount.
Review your budget. Every rupee saved is a rupee added to your emergency fund. Think about subscriptions you don't use, eating out less, or delaying non-essential purchases.
Treat it like a non-negotiable utility bill. Make it automatic, consistent, and off-limits for non-emergencies.
Emergency fund = easy access. Avoid locking it in ELSS, PPF, or long-term FDs. Opt for liquid mutual funds. The aim is safety and accessibility, not high returns.
If you find yourself in an emergency without a dedicated fund, you might face tough choices:
This is generally the least preferred option due to the potential for losing compounding returns, selling at a loss, and incurring taxes.
This can be a more advisable option, especially borrowing against existing assets.

If you have investments, particularly in mutual funds or shares, you might be able to secure a loan against them. This is often a better alternative to outright selling your investments for the following reasons:
Your investments continue to grow and benefit from market appreciation.
Loans against securities often come with lower interest rates compared to personal loans or credit card debt.
You avoid immediate tax implications that would arise from selling your investments.
You can repay the loan as soon as your financial situation stabilizes, potentially through a new income source or future savings.
However, one should be mindful of the interest rates and the risk of collateral forfeiture if you default.
Think of your emergency fund not as idle money, but as an active participant in your wealth building journey. It protects your existing investments, prevents you from making rash financial decisions, and allows you to stay disciplined when others are panicking. It's the quiet guardian that ensures your long-term financial dreams remain firmly within reach. Start building yours today, and sleep soundly knowing you're prepared for whatever life throws your way.
NJ E-wealth
Accidents Happen. Are You Covered?
Accidents Happen. Are You Covered?
In the past few weeks, India has witnessed a spate of accidents that have shocked the nation. From the tragic Ahmedabad plane crash landing incident that injured multiple passengers, to the unfortunate stampede during Royal Challengers Bengaluru's IPL victory celebrations, Mumbai local train and multiple reports of vehicles plunging into gorges in hilly states-these incidents are grim reminders of how unpredictability surrounds our daily lives.
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Key Add-Ons You Should Not Ignore
This add-on pays a weekly benefit (usually Rs.25,000 to Rs.50,000/week) if the policyholder is temporarily unable to work due to an accident. For salaried individuals, freelancers, or shop owners, this protects livelihood during recovery. It can be availed for up to 100 weeks, depending on the severity.

Example: A small business owner fractured his hip in a minor car accident. Though not hospitalized, he couldn't walk or operate his shop for 2 months. With a TTD add-on, he received Rs.50,000 per week, totaling Rs.400,000-critical to keep his business afloat and pay EMIs.
Children and the elderly are especially prone to falls, injuries. As individuals age, their bones become more brittle, making them more susceptible to fractures from even minor falls. Yet, their injuries may not lead to hospitalization, meaning health insurance may not come into picture.

A dedicated fracture cover within a personal accident policy specifically provides a lump sum payout upon diagnosis of a covered fracture, regardless of whether it leads to a permanent disability.
  • A 7-year-old injures her forearm while playing cricket.
  • A 70-year-old grandmother fractures her ankle slipping in the bathroom.
In both cases, the insurer pays a predefined amount (e.g., Rs.15,000 to Rs.50,000), regardless of actual expenses. This helps cover diagnostic tests, consultations, splints, or physiotherapy.
Everyone. But it's especially important for: Salaried, Self-employed, Housewife, Elderly, Children, Frequent travellers, etc.
When choosing a PA policy, prioritize:
  • Accidental death cover (Rs.50 - 100 lakhs or more)
  • Permanent disability benefit
  • Temporary disability (TTD) income support
  • Fracture benefit
  • Burns and disfigurement compensation
  • Child education benefit (on policyholder's accidental death)
  • No hospitalisation requirement for minor claims
We can't prevent every accident. But we can prepare for the aftermath. Whether it's a stampede, a holiday mishap, or a freak accident at home-Personal Accident Insurance offers the critical financial shield your health or life policy may miss.

In India's rapidly urbanizing and mobile society, where public events, travel, and daily commuting bring new risks, a personal accident plan is no longer a luxury. It's a necessity.

Talk to your Insurance Sales Person today to review your accident coverage-especially if you have elderly parents, school-going kids, or are self-employed. It's an investment in your safety and security that truly pays off when you need it most.
What is Dynamic Asset Allocation and How it Works
What is Dynamic Asset Allocation and How it Works
One of the most important decisions in investing isn't just what you invest in, but how you divide your investments. That's where asset allocation comes in. It's the process of spreading your money across different asset classes like equity, debt, and others to manage risk and aim for better returns.
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Dynamic Asset Allocation (DAA) is a method by which the portfolio's allocation between equity and debt is adjusted based on market conditions.

Unlike fixed allocation strategies that follow a set ratio, DAA provides flexibility by adjusting the allocation over time to respond to changing market trends and asset valuations. One of the most common approaches within DAA is to increase exposure to an asset class when its valuations become more attractive, typically by investing more when valuations decline.

A commonly used input in DAA strategies is market valuation, measured using different valuation metrics like the Price-to-Earnings (P/E) ratio, the Price-to-Book Value (P/B) ratio, and the Dividend Yield. Alongside this, indicators like government bond yields help determine how attractive equity is relative to debt.
There isn't a one-size-fits-all DAA strategy; the shift in allocation can be based on different models. Some strategies increase equity exposure when markets are down (counter-cyclical), some ride ongoing trends (pro-cyclical), and others blend both approaches.

To better understand how Dynamic Asset Allocation works in practice, let's look at a simple hypothetical example:
Scenario Date Nifty 500 P/E 10 Yr G-Sec Yield Equity Allocation Nifty 500 Next 3-Month Return Nifty 500 Next 6-Month Return
When equity valuations were most attractive / lowest P/E 2009-03-10 8.6 6.51 100.00% 90.12% 100.98%
When equity valuations were least attractive / most expensive 2021-02-15 41.05 6.08 41.17% -1.08% 12.12%
When the Bond yields were maximum 2008-07-11 14.61 9.46 55.88% -21.98% -30.60%
When the Bond yields were minimum 2009-01-05 10.29 5.05 100.00% 0.12% 47.51%
Source: CMIE, NSE, Internal Research. Data is for the period 13th August 2007 to 31st May 2025. The table illustrates a hypothetical Dynamic Asset Allocation model based on the market valuation and interest rates. It shows how equity exposure is adjusted across different market conditions using valuation (Nifty 500 P/E in this case) and interest rate (10-Year G-Sec Yield here) signals. The figures/projections are for illustrative purposes only. The situations/results may or may not materialise in the future. Past performance may or may not be sustained in future & is not a guarantee of any future returns.
When equity valuations were most attractive, like in March 2009, with the lowest P/E of 8.6x, the model raised equity exposure to 100%. This was followed by strong market gains over the next 3 and 6 months. Similarly, low bond yields also supported higher equity allocations, as seen in January 2009.

This highlights the core strength of DAA: it adjusts with changing market conditions, aiming to reduce risk and capture opportunities when they matter most.
DAA brings structure and flexibility to portfolio management, helping investors stay balanced through market ups and downs:
  • Helps manage risk: By reducing equity exposure during volatile or overvalued markets, DAA aims to cushion the downside during market corrections.
  • Adapts to changing conditions: Unlike static strategies, it adjusts based on current data, allowing the portfolio to stay relevant to the market environment.
  • Reduces emotional investing: A rule-based or model-driven DAA approach can prevent impulsive decisions driven by fear or biases.
  • Better risk-adjusted return potential: By actively shifting allocations, DAA can take advantage of opportunities across market cycles and offer better risk-adjusted return potential, as illustrated in the following chart:
Benefits of Dynamic Asset Allocation
Source: NSE, CMIE. For the period of 30th September 2006 to 30th September 2024. The "Fixed 50-50 Allocation without Rebalancing", "Fixed 50-50 Allocation with Half-Yearly Rebalancing" and "Dynamic Asset Allocation" are the proprietary asset allocation models of NJ Asset Management Private Limited. In "Fixed 50-50 Allocation without Rebalancing", 50% is allocated into Equity and Debt each at the start of the period. In "Fixed 50-50 Allocation with Half-Yearly Rebalancing", 50% is allocated into Equity and Debt each at the start of the period and the asset allocation is rebalanced on an half-yearly basis. In "Dynamic Asset Allocation", allocations into Equity and Debt each at the start of the period and on half-yearly basis is determined based on market valuations. Equity returns are represented by returns of Nifty 50 TRI whereas Debt returns are represented by the unannualised 1 month average yield of the 3Yr Indian G-Sec. The figures/projections are for illustrative purposes only. The situations/results may or may not materialise in the future. Past performance may or may not be sustained in future and should not be used as a basis for comparison with other investments.
The above hypothetical illustration shows how a dynamic, rule-based asset allocation strategy may deliver superior outcomes compared to fixed allocations, highlighting the potential cost of staying still due to Status Quo Bias.
Despite its advantages, DAA requires careful execution and commitment:
  • Depends on execution quality: The success of DAA depends heavily on the model, rules, or fund manager implementing the shifts.
  • Requires discipline and patience: Investors must stay committed to the strategy, even when short-term performance may not match that of traditional approaches.
  • Higher costs and turnover: Frequent reallocations may lead to higher transaction costs or tax implications, especially in actively managed DAA strategies.
Dynamic Asset Allocation Funds, commonly known as Balanced Advantage Funds, are a sub-category under Hybrid Mutual Funds. These funds follow the dynamic asset allocation (DAA) strategy with the goal of managing flexibility while participating in growth opportunities.

Over the years, this category has gained significant traction among investors for its ability to adapt across market cycles with the number of schemes in this category increased from 20 in May 2019 to 35 by May 2025, and the assets under management (AUM) more than tripled, growing from Rs.94,997 crore to Rs.2.99 lakh crore during the same period (Source: AMFI).
NJ Balanced Advantage Fund follows a 100% rule-based approach to dynamically shift its equity allocation based on market valuations and interest rate trends. There is no guesswork or emotional decision-making; the model is designed to respond objectively to changing market fundamentals, ensuring the portfolio adapts without losing discipline.

The chart below shows how the fund's equity allocation has adjusted in recent quarters in response to valuation metrics like the Nifty 500 and Sensex P/E ratios and the 10-year G-Sec yield. NJ Balanced Advantage Fund
Source: NJ Asset Management Pvt. Ltd., BSE, NSE, CMIE. Equity Allocation refers to the equity allocation suggested by the asset allocation model for NJ Balanced Advantage Fund on its respective dates. The Equity Allocation is calculated based on proprietary methodology. Simple Average of last 1 month's PE of Sensex and Nifty 500 is taken to show 1M Average PE.
A well-structured dynamic strategy helps investors stay disciplined, yet flexible. That's what Dynamic Asset Allocation is all about, not trying to time the market, but responding to it. It offers a balanced approach that can help you stay on course, manage ups and downs better, and invest with more confidence over the long run.
1) What is the difference between strategic asset allocation and dynamic asset allocation?
Strategic asset allocation follows a long-term target mix of assets and sticks to it, only rebalancing periodically. Dynamic asset allocation, on the other hand, adjusts the mix more frequently based on current market conditions.

2) Are dynamic asset allocation funds suitable for SIPs?
Yes, they are well-suited for SIPs as they adjust to market conditions and offer smoother returns over time, making them useful for long-term wealth creation.

3) What is the difference between static and dynamic asset allocation?
Static allocation keeps a fixed equity-debt ratio, regardless of market changes. Dynamic allocation shifts the mix over time in response to market trends and opportunities.

Investors are requested to take advice from their financial/ tax advisor before making an investment decision.

MUTUAL FUND INVESTMENTS ARE SUBJECT TO MARKET RISKS, READ ALL SCHEME RELATED DOCUMENTS CAREFULLY.
RISKOMETER OF THE SCHEME
The riskometer is based on the portfolio of 31st May, 2025 and is subject to periodic review and change, log onto www.njmutualfund.com for updates.
loans
Customer process mandate at the time of the loan application for EMI collection. A mandate facilitates the seamless deduction of the EMI from the customer's bank account during the tenure of the loan. Approval of the mandate is necessary. Post disbursement, a few of our customers do not provide valid mandates even after their mandates get rejected by their bank.

We have therefore made the following changes with effect from 1st August 2023:

Delayed Mandate Registration Charges: Customers whose loans have been disbursed post 1st August 2023 and where we do not have a registered mandate at the time of the presentation of their 2nd EMI would be liable to pay a delayed mandate registration charge amounting to Rs 200 + GST on every such EMI due date.

This charge is payable even if the customer pays his EMI in advance of the EMI date.

A clause about Delayed Mandate Registration Charges has been included in the Master Terms and Conditions, e-signed by the customer at the time of availing the loan.

We are not intending to earn any large fee by levying the above charges associated with customers with unregistered mandates. We are better off if all mandates are registered. We advise customers to submit registered mandates with us at the earliest.
Fund Manager INTERVIEW
patner Interview
Mr. Nikhil Rungta
Chief Investment Officer - Equity, LIC Mutual Fund
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Anand S Sopte (ARN-58745)
AMFI REGISTERED MUTUAL FUND DISTRIBUTOR

Anand S. Sopte
  • Financial Assessment
  • Retirement Assessment
  • Child Future Assessment
  • Portfolio Review
  • NRI INVESTMENTS
  • mutual fund : debt/equity/elss
  • insurance : general/health/life
  • portfolio management services (pms)
  • bonds : tax saving bonds

"We have taken due care and caution in compilation of this E Newsletter. The information has been obtained from various reliable sources. However it does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions of the results obtained from the use of such information. Investors should seek proper financial advise regarding the appropriateness of investing in any of the schemes stated, discussed or recommended in this newsletter and should realise that the statements regarding future prospects December or December not realise. Mutual fund investments are subject to market risks. Please read the offer document carefully before investing. Past performance is for indicative purpose only and is not necessarily a guide to the future performance."

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