Bimal Parekh has an enviable job or so we might think. Managing investment portfolios of Bollywood biggies comes with its own set of challenges. Parekh seems assured as he enjoys the confidence of his clients, who have been with him for more than a decade now. In an interview to Yogini Joglekar and Satish John, he is forthcoming on most topics and also reveals a few vignettes about the peculiar needs of some of his clients. For instance, Aamir Khan is “extremely conservative” and “risk averse” when it comes to investing. Khan believes that he takes tremendous risk in his career of movie making that he doesn’t have any appetite for taking other risks, Parekh says. Edited excerpts:What does the market have for the investors?This is not a good time for the retail investors to enter the markets. They need to wait for at least six months before market sentiments improve. Till then, investing in debt is more lucrative. The rationale behind this is bank fixed deposits or FMPs (fixed maturity plans) are giving decent returns against equity. Meanwhile, with political uncertainty, foreign institutional investors are wary of investing in India. The government has been shifting their position quiet often leading to a slow down in foreign inflows.What is the interest rate without any risk that you think is good?NHAI (National Highway Authority of India) offered 7.75% tax-free returns, which effectively would work out to almost 11%. In addition, it’s a triple A rated paper issued by the government. The only drawback I see here is the funds are blocked for longer duration, But I think, retail investors including HNIs (high net-worth individuals) should make most of such opportunities.In the last six years, can you highlight some of the good and bad times?Retail investors had invested heavily in Reliance Power because they had blind faith in the brand, but they lost heavily. A smart investor usually escapes such situations, but retail investors get caught. Once bitten, they refrain from entering the market for at least two years on an average. The primary market never recovered after that except for Coal India which was a landmark issue where people made money as the pricing was correct and helped breathe life into the retail market.What is your take on the market for investors for the nest six years?I am very bullish on India’s growth story in the long term. By long term I mean a timeframe of at least 3-5 years. So if you are a long-term investor and are not looking at timing the market, anytime is a good time to buy. One should avoid jumping from one company to another. And if you believe a company is strong fundamentally, hold on to it.What are the other asset classes which investors can consider?Debt instruments and real estate portfolio are the other classes that investors can consider. Now that Reliance Mutual Fund is coming up with real estate fund, with a minimum investment of ¤25 lakh, even the retail investors can participate in the realty segment which otherwise they couldn’t due to legal complications. With such real estate funds, which come with more due diligence, it becomes easier for retail investors to spread their risk over different cities. Gold and silver have already reached new highs, so I personally don’t think it will do better than this.Since you cater to a few stars from the entertainment industry, do you think investment needs are different depending on job profiles?Investments depend upon the investor’s job profile, source of income and type of work. We do a lot of work for people from the entertainment industry where the earning-income spend is limited. For instance, a female actor’s career span is about 6-8 years, very different from a banker who may retire after 30-40 years. Hence, depending on the age and source of income, a person should invest in various asset classes.Out of real estate, bank FDs, debt instruments and equity, we think equity is the best one to beat inflation. Hence, a person between 27 and 35 age group should invest 60-70% in equity, after meeting his priorities such as buying a house or car are over. But, the view should be long term because equity has outperformed every other asset in long term. And as the investor ages, the percentage of equity should reduce and investment in debt should increase. Because, as you are ageing, you will need more money and at that time equity becomes a risky proposition to deal with.What would you recommend for a person with a shorter career span?Capital safety should be the only priority when it comes to investments. This is because he would have only few years to make money and then maintain the same lifestyle with the money he earned during that period. It would be a challenge if he didn’t make the most of his earnings. So if he enters in a bad phase and if the market doesn’t improve when he needs cash, he would end up losing money. Hence, 65:35 should be the debt to equity ratio. But as Pierre Corneille said: “To win without risk is to triumph without glory.” Hence a person has to take risks, but how much to take and where to take has to be seen.Should HNIs or celebrities hire specialised consultants to manage their finances?They should technically hire consultants who are specialised in investing in other class of asset management. But, the only drawback is that relationship managers try to push products in which they get higher commissions or where they have to achieve targets. So if you look at it, many times they make you take risk. There is a very thin line where you should be sure of being with a private banker or an investment/wealth advisor. They understand the markets very well, but at the same time they have their compulsions to recommend certain products inspite of a product that is doing better. They have all the expertise, but they work on commissions and one should not invest unless you have complete faith in him.Out of exotic investments, how does one go about investing in art?In case of investments in art, we suggest one should go for saffron art because an individual wouldn’t know the prices of art made by new painters. There are two types of investors in art—-one invests purely out of passion and the other totally with an investment view, unlike equities which are never out of passion but only with a profit motto.Tell us about the investment habits of your clients such as Aamir Khan and Katrina Kaif?Well, Aamir Khan is extremely conservative and risk averse when it comes to investing. He often says he takes tremendous risk in taking film projects and hence he has no appetite for taking other risks. He wants to sleep peacefully. It is the same with Katrina Kaif. Both prefer interest earning instruments such as bank deposits or bonds to equities or other instruments.

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