Laws of Wealth

Mar 2023
3 min read
1. Emotions are the enemy of good investment decisions.
2. Making investment decisions will never be the reason you get out of bed in the morning but whatever does get you out of bed can certainly be at the forefront of how you make decisions.
3. Bucket (either physically or mentally) your assets relative to your deeply held ambitions and long-term financial goals.
4. Prepare your finances for famine in times of feast and feast in times of famine.
5. The fact that people are fallible is your biggest advantage in the accumulation of greater wealth. The fact that you are just as fallible is the biggest impediment to that very same goal.
6. If diversification is the “eat your vegetables” of investing, high conviction diversification adds a little spice.
7. This tendency to conflate price with quality may lead us to overpay for clothing, cars or coffee, but is overall fairly harmless in terms of our retail purchases. In investing, it is disastrous.
8. Forecasts don’t work and neither does investing based on forecasts.
9. Excesses of all kinds are never permanent.
10. Just as with wine and public speakers, the richer the valuations of the stock market, the better we think it will be. Unlike wine and speakers, there is actually an inverse relationship between price and performance in stocks – the more you pay, the less you get.
11. Shares in a company can never be thought of as cheap or expensive based upon price alone, without carefully considering the quality of the company.
12. Just as we assume that a kind friend today will be a kind friend one year from now, we also mistakenly suppose that today’s hot sector will grow unabated into the future.
PGIM India Asset Management Private Limited
(CIN - U74900MH2008FTC187029)
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The information contained herein is provided by PGIM India Asset Management Private Limited (the AMC) on the basis of publicly available information, internally developed data and other third-party sources believed to be reliable. However, the AMC cannot guarantee the accuracy of such information, assure its completeness, or warrant such information will not be changed. The information contained herein is current as of the date of issuance* (or such earlier date as referenced herein) and is subject to change without notice. The AMC has no obligation to update any or all of such information; nor does the AMC make any express or implied warranties or representations as to its completeness or accuracy. There can be no assurance that any forecast made herein will be actually realized. These materials do not take into account individual investor's objectives, needs or circumstances or the suitability of any securities, financial instruments or investment strategies described herein for particular investor. Hence, each investor is advised to consult his or her own professional investment / tax advisor / consultant for advice in this regard. The information contained herein is provided on the basis of and subject to the explanations, caveats and warnings set out elsewhere herein. The views of the Fund Manager should not be construed as an advice and investors must make their own investment decisions regarding investment/ disinvestment in securities market and/or suitability of the fund based on their specific investment objectives and financial positions and using such independent advisors as they believe necessary.