|
Election season is on and political war at its peak. Political parties are trying to woo voters in their own way. There are blame games all over and each one is trying to override another. Indian voters are really confused - whether to choose Congress or BJP and then there are regional parties as well. There is another kid in the block which is Aam Aadmi Party (AAP). Whatever be the outcome, we all want a government which can take decisions that work well in the interest of our country. Politics have a lot to do with our investments and overall financial life. Politics have a lot do with investments as one wrong decision can have a huge impact on our financial well being.
In this series of personal finance guide, we will try to understand how investments strategies are related to politics and what we can learn out of it. Through this article one might also figure out how we can elect a good leader for our nation. Please note that these are my personal views on political parties as well.
Congress Strategy
Don't make people richer. Keep them poor, exploit them by way of higher inflation, high corruption etc. Instead of talking about natural way of growth where competition should exist, they believe in doling out populist measures like guaranteed food, guaranteed employment, free laptops, free medicines, free education and what not. Do remember that guarantee comes with a huge cost. India is such a resourceful country but still the majority of its population is extremely poor. Even after completing 65 years of independence India is still struggling. There are countries which got their independence long after India got its independence and still they are doing wonderfully well. Since Independence Congress has ruled India for about 50-55 years which is enough time to develop a country.
Guaranteed investments work on the same lines as congress does. Guaranteed investments would definitely give you what has been guaranteed but think about it do the guaranteed returns keep pace with the rising inflation. Can you buy the same quantity of goods and services with those guaranteed returns which you used to buy 5 years back???? The answer is NO. This is the reason; that despite Indians are good savers, they are still poor. Guaranteed investments look good when you hear about them but in long run, they will never make investors rich.
For instance, endowment policy gives investors nothing during the policy period, but declares some bonus at the end; similarly congress also declares some sort of subsidies towards the end of their election tenure. It's like paying your hard earned money during the entire tenure to get peanuts at the end.
BJP Strategy
Gujarat is a wonderful example of development in India. Prosperity and growth is what comes to our mind when we talk about Gujarat. Industrial development, agricultural growth, service growth etc all are on rise in Gujarat. Narendra Modi, Chief Minister of Gujarat and also the prime ministerial candidate of BJP talks of creating employment, inclusive growth, healthy competition for the coming Lok Sabha elections etc. The election campaign of BJP for 2014 elections is "To build a vibrant India".
Such is the case with equity investments. BJP's election strategies resemble investing in equities. Equities flourish when there is a growth and offers real long term benefit. Even current equity market is waiting for BJP to form the next government. Narendra Modi has clearly spelled out through Gujarat that with due time and committed efforts towards a goal you can achieve anything. Similar is the case with equities if given due time they outperform all the other financial assets. For long term financial goals one should adore equities. BJP is more like a mutual fund. Professional people drive it rather than a dynasty of one or two families.
Other parties
Talk of Aam Aadmi Party; they are new kid in the block. They are advertising the weaknesses of other political parties like it happens in the financial market. With the advent of any new product in the market the other products are portrayed as a waste. But remember, just like Aam Aadmi Party the new product is yet to prove itself. One should not just go overboard with the new product and invest all their money in it. If you really find it good and understand it's need within your portfolio, may be you can allocate funds towards it.
With the availability of so many options for a good leader and investments; it's difficult to decide which one is better. While choosing a good leader for the nation, we seek assurance of good governance, growth and fruitful decision maker. Similarly we want to invest, to make our money work for us. While making choice of investments we seek a product that assures effective management of our funds and growth from time to time. Hence politics and investing are no different.
It's the right strategies combined with right set of people which will work well for both politics and our investments.
Share this article
|
