What defines the word investment? I believe that investment is a journey, and this journey is a long, continuous one with many relevant milestones. These milestones are primarily about making one or two specific decisions. I will endeavour to elaborate on a few of the most relevant decisions in this article.
The first milestone in one's investment journey is the start, or the spark, as I refer to it. The most important thought that one should ruminate on is most definitely the purpose. The most important questions, and decisions, during this milestone should be focused around why you want to embark on the investment journey and what do you hope to achieve
The intensity of the investment initiative should be tempered with clarity of purpose.
The next most relevant milestone is the initial euphoric result manifestation, positive or negative. The first year is one that will create the most upheaval in terms of emotion. There are two obvious probabilities in this scenario, the first scenario being one in which the investor faces unequivocal success in his decision making, and in the event of the first few transactional experience being positive and profitable, there is a propensity to take seemingly intuitive, but apparently knee-jerk decisions most likely centred around buying and selling. This is entirely understandable as the new investor wants to understand that singular feeling of tangibility of profit realisation. The same is applicable if the first few transactions are loss making - there will be knee-jerk reactions but here the reason for these decisions will be the continued hope of profit realisation.
So, in this notional milestone, the decisions are primarily based on the concept of cash generation and not wealth. Here the general understanding should be centred around making the distinction between money and wealth. I believe that money is a short-term concept and that wealth is a holistically long-term ideal. Hence, if the investor thinks more about permanence during this milestone, it may hasten the learning curve and incorporate a sense of calm, earlier than usual. This sense of calm is what determines the level of sustained success that comes about in the next milestone period.
Now we have reached the most relevant period in the life of an investor.
The journey has begun and the initial euphoria of success and failure have been absorbed, along with the knowledge repository that is created as a result of these experiences. Armed with this knowledge, the most important decision that the investor must make now is to frame his or her individual and unique investment philosophy. This philosophy is probably what is going to set the tone as far as investment criterion, methodology, flexibility and credibility is concerned. This may also be seen as a restart or recalibration of the journey, but in reality this is a notional middle point in the journey and a very important milestone at which a long time could, and should, be spent in formulating the investment philosophy. This will determine the path of the future journey, the sustainability and also the permanence of the wealth generated. This theme of long-term permanence resonates beyond individual journeys.
And ultimately, isn’t that what true success, health and wealth is all about? Permanence. The propagation of ideals and ideas happens best through debate, discussion and most pertinently through credible societal platforms that are profound in scale, yet specific, in terms of impact.
And this is where organisations like India Global Forum come in and provide a platform to explore how investments and partnerships can create enduring value across regions, fostering sustainable growth and prosperity for generations to come.
I am looking forward to talking about what guides my investment policies and principles at India Global Forum’s Middle East and Africa 2024 in Dubai.
To know more about India Global Forum’s Middle East and Africa 2024 November 25-26, log on to www.indiaglobalforum.com
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