Friday, 14 January 2022

Makar Sankranti and Investment Lessons

 Makar Sankranti marks the movement of the Sun from tropic of Cancer to the tropic of Capricorn. ‘Capricorn’ is known as ‘Makar’ in India and ‘Sankranti’ means movement and hence named as ‘Makar Sankranti’.

The Makar Sankranti, also known as Til-Gul in Maharashtra, Uttarayan in Gujarat, Pongal in Tamil Nadu, Poush Sankranti in West Bengal and Bihu in Assam.

It is a festive time for the farmers because it ends the biting winter season and thus marked as the beginning of new harvest season. The warmth in the air is appropriate to sow new seeds. Therefore, Makar Sankranti is also celebrated as the Thanksgiving day.

Kite flying is very common on this day, so let us learn few money lesson from kite flying on this occasion:

1. Manjha (The right investment avenue) holds the kite (financial goals) :

When flying the kite, we don’t use any random thread but use only ‘Manjha’ because Manjha (string) is an abrasive string coated with powdered glass it provides the quintessential strength in flying kite combats and help us in ensuring no one cut short, making kite flies higher. Choosing the right kind of Manjha is very much similar to choosing the right investment avenue to invest and achieve financial goals. For that we need to consider proper asset allocation which suits our investment goals and risk profile.

2. Market volatility is like wind when flying kites:

Wind plays a crucial role in keeping afloat a kite in the sky. Too much wind could damage the kite while too little wind will make it difficult to keep kite afloat. Wind is very crucial as without it the kite cannot be launched in the sky. Similarly, in the stock market, there will be volatility. Market will keep on moving up & down sometimes very frequently and sometimes slowly. But we have to remain calm and hold on to our investments. We should not take hasty decisions and surrender to the market volatility. We need to keep the volatility in mind and make informed decisions without jeopardizing our investment plans.

3. Flying kites (Achieving Financial Goals) demands passion, discipline, focus, and patience:

It is not easier to stand all day under the sun, and continue flying passionately. Flying kites need utmost passion, focus and discipline. It takes a lot of determination to stand all day and deals with every kite that is getting in our way. Long-term Investing is quite similar to flying kites. It requires strict discipline, focus, and patience. Not every kite can reach a higher horizon. Some may be cut while some get damage. Similarly, not all investments made can generate returns. Sometimes, we need to cut losses and sometimes to just stick with your investments to get the potential rewards. However, achieving financial goals is possible only with strict discipline, focus, and being patient towards our investments.

4. Like Flying Kite We need a companion (Advisor) to go high:

Normally in kite flying we see two people manging one kite while one manoeuvre the kite the second person is standing beside him/her, holding a Firki/Charkhi whose role is to release and retract the right amount of string at during that time. Even though one person is capable of managing both, but it becomes easier to fly with a companion and take the kite to higher horizons.

Similarly, having a financial advisor by our side makes it easier to take our investments to higher horizons. A financial advisor plays quite a similar role, helping us in a gusty wind, and provides the investment tips at the right time.

 

Wish you a very Happy Makar Sankranti, Lohari, Bihu & Pongal.

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