Shailesh Kelawala, 49, runs a textile business. His family consists of his wife, Vishali, and daughters Harnisha (26), Kruti (22), and Vishwa (18).

Until 2007, when Kelawala was in his mid-30s, his investments were primarily into traditional instruments, such as fixed deposits, post office instruments, and insurance policies. However, the boom in the stock market between 2004 and 2008 attracted him to stocks, and he started investing in them in 2007, when the markets were nearing their peaks.

Without proper financial advice and guidance, Kelawala jumped into stock investments and trading to make quick money, but ended up making huge losses, as the market crashed in 2008. His daughters were aged between four and 12 then.

Kelawala then decided to stay away from equities or any equity-related instruments altogether, and began investing only in safe traditional instruments.

Kelawala had set various goals for his family, including his daughters’ higher education and wedding, and his own retirement plan. He decided to look for a professional investment advisor who could help him make proper investments. His children were still young, and he felt the need to invest for their future as well as his own retirement needs.

After nearly two years, he came across Vishal Prafulchandra Dalal, founder of investment advisory firm Solitaire Financial Solutions. After their first meeting, Dalal decided to meet the entire family and discuss their investment goals in detail.

Given their recent bitter experience in the share market and the relative safety that traditional instruments offered, it was extremely difficult to get the family to invest in instruments other than traditional ones, Dalal says.

Dalal then initiated them into mutual fund investing with a small amount, while consciously building a conservative debt-driven portfolio with an asset allocation strategy. As months passed, Dalal kept on adding funds in tranches from Kelawala’s traditional investments to the mutual fund portfolio till 2012.

After two years, Kelawala saw his mutual fund portfolio doing reasonably better than the traditional investments. It was a good experience for him, and Dalal convinced him to invest in mutual funds and equity-related instruments for his goals.

Says Dalal: “I ensured we meet regularly, so that I could explain to him the importance of goal-based financial planning, and why linking mutual fund investments to goals is a must.”

In February 2012, Kelawala finally outlined his financial goals to Dalal. These were his daughters’ higher education when they turn 18, their weddings at the age of 25, and lastly his retirement at age 60.

Now that he had a time frame for those goals, Dalal recommended Kelawala to start with a monthly systematic investment plan (SIP) of Rs 45,000. However, the next 18 months turned out to be very volatile, and severely impacted the market and Kelawala’s investments.

Given the sudden negative return in his investments, Kelawala began having second thoughts about whether to continue with them. Dalal convinced him to remain focused on his long-term goals and continue with the SIPs.

After two years, when the market surged again in 2014, Kelawala saw the positive returns on his investments and wanted to invest more into an aggressive mutual fund portfolio. But Dalal convinced him to stick to his desired asset allocation strategy.

This proved to be helpful, when in 2018, the market again went for a correction. Kelawala’s portfolio outperformed, thanks to his asset allocation strategy and his disciplined investment approach.

Kelawala became overconfident and decided to dabble in stocks without informing Dalal, only to incur losses. Thereafter, he decided against speculating the market again.

The 2020 pandemic was a very difficult phase for Kelawala. Not only did the value of his portfolio nosedive, even his business suffered heavy losses. But, thankfully, his portfolio offered him enough liquidity to take care of the SIPs as well as his employees’ salaries, helping him sail through the turbulent times with ease.

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Lessons To Be Learned

• To begin with, Dalal ensured a goal-based and tenure-based financial plan for Kelawala. The goals were: daughters’ higher education and wedding at ages 18 and 25, respectively, and his own retirement at age 60.
• The investments schemes were chosen in accordance with the tenure of the goals.
• Third, he advised Kelawala not to monitor his investments, which were all long-term, on a monthly basis as that would unnecessarily add to his mental stress. Investments took time to mature, and the review ought to be done on an annual basis, and the necessary changes incorporated if required, in accordance with the advisor’s recommendation.
• Lastly, he asked Kelawala to exercise patience. He told Kelawala that volatility was a part and parcel of the markets and provided ample opportunities for long-term wealth creation, if done properly.

Vishal Prafulchandra Dalal, Founder of Solitaire Financial Solutions

Disclaimer

Financial Planning of Shailesh Kelawala is based on the “personal opinion and experience” of Vishal Prafulchandra Dalal , founder of SolitaireFinancial Solutions.  It should not be considered professional financial investment advice. No one should make any investment decision without first consulting their advisor and conducting research and due diligence.