After a six-year stint at Morgan Stanley and a run with the wealth management arms at Lloyds TSB Private Banking, London and Standard Chartered Bank, Mumbai, Richa Karpe is currently the director - investments, at Altamount Capital Management. Karpe, who looks after the asset allocation for clients in multifamily office space, urges investors to stay away from trading in stocks without the advice of a financial consultant. To reap inflation beating returns, her strategy is to invest in equities and real-estate.
Excerpts of the interview with Business Line:
What does money mean to you? How has your idea of money changed with time?
When I was growing up, my idea of money was equated to material wealth, fun and frolic. Now that I have a family of my own, this idea has changed to a qualifiable goal tied with responsibility towards my family and business. Money for me now means the best education for my kids, quality health care for my family, investment for my business and a comfortable living.
What are your top financial goals?
My top financial goal is to get the best education for my three children. Besides, a larger family home in Mumbai and a holiday home too figures in my list.
How much of your money is invested in savings bank, deposits, bonds, stocks, real estate and gold?
Equity and real-estate garner the maximum share in my investments. About 60% of my money is divided equally between the two. Besides, I have invested 15% of my savings in private equity and about 5% in art. Bank deposits, savings bank and gold & silver form the rest.
Tell us about your most successful investment.
I`ve made real estate investments in Mumbai and London (when I was living there) which have worked exceptionally well for me as well as art. The other investment instruments which have worked well are mutual funds.
One mistake on investing or saving that you regret?
I`ve burnt my fingers trading in penny stocks, specifically trying to time the bottom and peak market levels.
What has been your most important learning experience so far?
I would advise investors to stay away from trading in stocks directly without the advice of a financial consultant. Also trying to time the market when it is at an all time high and listening to stock tips and trading ideas which lack basic fundamental analysis doesn`t help genuine investors.
Tell us about any books/ investment gurus who have inspired you.
`Value Investing: From Graham to Buffett and Beyond` is one book that has inspired me. The other interesting book is `Liar`s Poker`, a non-fiction, semi-autobiographical book by Michael Lewis describing the author`s experiences as a bond salesman on Wall Street during the late 1980s.
What is the amount of wealth you hope to retire with? How are you creating this corpus?
I have looked at this in 2 ways. The first is secured investments with regular investments in equities and real estate which give me inflation beating returns. The second are the returns from my business venture as an entrepreneur. This will be my multi-bagger which can give me returns in the range of 3x to 10x over a 10 year horizon.
What is your message on saving and investing to young people just starting out on their career?
The first thing I would advise investors is to start young, and have clarity on your goals. This, combined with a 5 to 10 year view on your investments will help. The other aspect is to start saving a certain percentage of your salary/income every month for your family, which may get bigger in later years. When you are single and don`t have any liabilities, it is easier to do this. Finally, when family and other commitments come into play, it would be an easier task to tide over and manage the pressures of day to day living.
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