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[2 Jul 22] Newsletter: Gold as an Investment, Yale Model of Investing, Buying water Businesess & More


5×5: Five articles summarised in five lines 🌟

  • Gold: Is gold still an efficient investment option?
  • Framework: Yale model of investing
  • Commodities: Water as an investment
  • Personal Finance: When do you need a financial advisor?
  • Concepts: Don’t take emotional decisions in bear market

Is gold still golden?🏅

  • Gold is a celebrated asset class across the world yet it is failed to live up to its expectations
  • Gold hasn’t proved to be a hedge against inflation
  • Gold hasn’t been effective in protecting your wealth during a crisis like war
  • Gold hasn’t been an instrument that’s an efficient wealth compounder against alternatives
  • The best way to invest in gold is through SGB bonds

Podcast – Is it a good time to invest in gold?

The Yale’s Model: People, People, People ⭐️

  • Top Gun made a billion dollars at the box office through the same playbook it used for the original movie.
  • Similarly, investing also has time tested playbooks that help make effective decisions.
  • David Swensen, who managed Yale’s endowment fund, believes that investing in, investing with, and investing for good people enables long term wealth creation.
  • Superior performance most often results comes from colleagues, teammates, and partners who make each other better.
  • In a period like the one we are currently living through, one defined by increasing uncertainty, declining confidence, and an unclear road ahead, sticking to a proven playbook focused on high quality people is as important as ever.

Read More – The Playbook

Water as an investment? 🌧

  • Water businesses have a recession hedge because of the perpetual and natural demand for water, which isn’t driven by fluctuations in gross domestic product.
  • We use water in our daily life whether GDP is up to two or down two.
  • The water industry is characterized by some of the most positive long-duration, inflation-protected pricing power of any industry, and it’s not well understood by many or most investors.
  • Despite being a very valuable natural resource we have grossly mismanaged it.
  • As an investor, we should also consider water scarcity as a covariant risk and integrate it into risk-return ratio calculations.

Read More – Water Investments Are No Longer Just an Environmental Play

Isn’t there enough free advice out there, already? 🤔

  • Money management is crucial now more than ever, given all the wealth that has been lost in the last six months.
  • If you are tired of doing it yourself, you may need a financial advisor who takes more informed decisions.
  • If you have complex financial life and need help navigating it, then hiring an advisor might be right for you.
  • If you want a second opinion or you need someone to talk you off the ledge during a volatile market, hiring an advisor can do wonders for your financial peace of mind.
  • Lastly, you should only consider hiring a financial advisor if you aren’t on the fence about it. If you are still debating, then it’s not for you.

Read More – When Should You Hire a Financial Advisor?

Don’t decide emotionally☝️

  • Our emotions not only impact our decisions, they can dominate them; leading us to make choices contrary to what we would rationally believe to be the best course of action.
  • The severe negative emotions that we may experience during a bear market, such as fear or dread, leave us vulnerable to overstating the risks of a given situation leading to rapid, short-term decisions.
  • There are two ways to ward off the dangers of emotion-laden decision making.
  • First, is to remove ourselves from emotional stimulus – turn off financial market news and check our portfolios less frequently.
  • Second, we should never make in-the-moment investment decisions, as these are likely to be driven by how we feel at that specific point in time.

Read – Bear Markets Are a Test of Investor Emotions

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[2 Jul 22] Newsletter: Gold as an Investment, Yale Model of Investing, Buying water Businesess & More
[2 Jul 22] Newsletter: Gold as an Investment, Yale Model of Investing, Buying water Businesess & More

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