Know your Investor Animal Spirit!

WEALTH EXPRESS: December, 2024 ISSUE: 25

The world is full of people with different behaviour. Similarly, in the investment world, these behaviours are often compared to different animals, with each personality resembling a unique animal trait.

Like, Rakesh Jhunjhunwala was known as ‘The Big Bull’ while Jesse Livermore built a fortune of $100 million 100 years ago, during The Great Depression and was known for Bearish bets. However, he left the world leaving behind liabilities instead of any assets. (It also tells us why behaviour is so important in money management).

Bulls and Bears (Teji & Mandi) are the most well-known, but did you know there are many more animals that represent unique investor behaviours?

Let’s know the stock market animals and what they mean:

Bull ??Bulls represent optimism and growth. A bull symbolizes a positive market. When the market is in a bullish phase, investors are confident, and stock prices rise. Example: The market has been bullish since 2020. But overconfidence can lead to risks in overheated markets.

Bear ??The bear market is the opposite of the bull market. It reflects negativity, with falling stock prices and pessimistic investors. Although it might seem unfavourable, bear markets are excellent times to invest for future gains. Example: A bear market occurred when stock prices dropped almost 40% during the Covid Pandemic, and we all know today that it was the best time to invest.

Turtle ?? Turtles are long-term investors who buy right and sit tight and focus on steady and consistent growth. Example: Investing in Mutual Funds give you consistent growth.

Rabbit ?? Rabbits are short-term investors aiming for quick profits predominantly from price movement. They take positions on hearsay tips, market narratives, and media. Example: Buying shares in the morning and selling them by the afternoon to make a profit, BTST? (buy today, sell today ) kind of trades.

Pig ?? Pigs are emotional and greedy investors who ignore diversification and take big risks. They often suffer significant losses or gains. Example: Such personalities invest mainly in penny stocks.?

Chicken ?? Chickens are fearful investors who panic during market dips and make rash decisions. Example: Selling & panicking whenever the market drops. They are continuously on mobile app to track their portfolios.?

Ostrich ?? Ostriches ignore negative market conditions, hoping they’ll improve on their own with time. Example: They continue investments despite market noises and focus on their primary profession more.

Sheep ?? Sheep follow the herd, relying on others’ recommendations without forming their own opinions. Example: They are easily influenced by people, morning walk friends, news channel anchors.

Dog ?? Loyal and income-focused, dogs prioritize value and stability over speculative growth. Willing to wait out the tide to see the growth. Example: Warren Buffet is a classic example, who does value investing.

Other Special Mentions:

The Titanic Whale ?? Whales are powerful investors with lots of money whose large trades impact the market. Example: Hedge funds executing massive trades.

The Predator Shark ?? Sharks manipulate stock prices to make quick profits, often at others' expense. Example: Manipulation of stock prices can lead to windfall profits for bulk traders at the cost of retail investors.

Dead Cat Bounce ?? This term describes a brief upward trend during a long-term bearish phase, also known commonly as ‘a relief rally’. Example: A temporary stock price rise before resuming its fall.

Embrace Your Inner Animal

Understanding your stock market animal helps refine your strengths and address your weaknesses. So, what’s your spirit animal? Navigate the investment? jungle wisely!

Did You Know?

PM-JAY - Pradhan Mantri - Jan Arogya Yojana

The Govt has recently extended the Free Medical Insurance Scheme under Pradhan Mantri - Jan Arogya Yojana to cover all Indians above the age of 70. The scheme covers every individual above the age of 70 without discrimination of gender, income, place of residence etc for a Free Annual Health Insurance cover of Rs 5 lacs. Those eligible as per age can register for this with their Aadhar Card and avail of the services in the listed Government Hospitals and empanelled Private hospitals.

Please refer to the document link below to understand the registration process and hospital list.?https://drive.google.com/file/d/1un3O_HGHTUisEf6uzG3PevHNZPBlDcI4/view?usp=drive_link

Multiple Nominations in Bank Accounts Successive or Simultaneous

Now you can have up to 4 nominees in your bank account instead of 1 earlier. On your death, money will go to these nominees based on 2 methods. You can add them as ‘Successive’ or ‘Simultaneous’ nominees.

What’s the difference?

In Successive nomination - The second nominee can take out money only if the first nominee is not available. If the second is not there then the rightful heir will be the third nominee. Then the fourth.

In Simultaneous nomination - All 4 nominees can take out money as per their share of eligibility. Everyone has equal rights if no specific share is mentioned without an order or rank of nomination. Holder can also specify % of share for each nominee.?

However, in bank lockers, only successive nomination will be allowed. The rank of nominees will be followed one after another.

Benefits of this change of rule - let me give you a real example here.

One of my relatives, 64 years old, died in 2015-16, somehow all his savings was transferred to his bank account. Upward of Rs 42 lacs.?

This uncle had 3 sons and 1 daughter. The nominee in the bank account was his younger son who he made a nominee some 15 years ago. At that time all others were married and the youngest son had just passed out from school. No one cared after that about the nominee in the bank account.

After his death, the youngest son got all the money and refused to share it. Everyone needed some money to help with college fees for kids or to pay off loans. But there was no help as per the law.

Today they do not talk to each other, due to this unwillingness to share the money.

Similar cases happen everywhere. We see how soldiers die and their parents get nothing as usually their wives are nominees.

This amendment in law will change it.