Sunday, May 11, 2003		Books

Becoming rich without tricks
B.S. Thaur

The Winning Portfolio: How to Choose the Best Mutual Funds
by Paul B. Farrell. Vision Books.
Pages 112. Rs 145.

THIS Indian edition by American author Paul B. Farrel contains practical advice guiding investors on how and which of the 10,000-odd mutual funds in the market to choose for investment. Though the book is addressed to American investors, it is also appealing to an investor in India where people generally are not investment savvy and the mutual funds activity as well as stock exchanges are at the evolution stage.

In the early 1990s big, small and new investors got attracted to the stock market with the opening up of the economy. But it proved to be ephemeral when manipulators and tricksters like Harshad Mehta committed fraud after fraud in the stock market, hitting the investor who is still licking its wounds and is scary of investments.

However, with sharp decrease in rates of interest on bank deposits, post office savings, and other government instruments and exemption of dividends from income tax, the small investor is again rushing for investment avenues like mutual funds, which can ensure a good regular return. Though the fiasco of 2001 in the Unit Trust of India—the biggest mutual fund, worth Rs 75,000 crore—scared the investors, after its re-organisation the UTI is on a revival trail. Incidentally, the retirees under voluntary retirement scheme from banks and other public sector undertakings have stimulated the search for secure investment avenues. About 28 mutual funds reported in the Indian market are vying for a pie in the fresh upsurge of the investors.

This book can prove a strong medium of awareness and enlightenment to the investors to park their savings profitably. The author, Editor of CBS Market Watch, Associate Editor of the Los Angeles Herald Examiner and Chief Operating Officer of Financial News Network, USA, obviously, is an authority on investment. In this book he has brought out "Ten Rules" as his "Ten Commandments." In the first part of the book, 10 rules are explained in separate chapters. The stress is on the one-liner, "Do it yourself," and the "discipline" needed to be exercised.

Explaining in a simple and straightforward manner, the author goes to build and boost the mental attitude necessary for a successful investor adhering to the 10 principles he has set. The author avers that "even if you lost on your broker’s tip or on some professional’s recommendation, it is you who has to bear the loss"—so why not do it yourself, why listen to the advice of others. The author clarifies that this book is not about clever tricks on how to get rich quick. "Yes, you can become a millionaire but it takes a little discipline." The author is aware that there is an Internet revolution going on, cyber technologies and computers, i.e., shifting of power from Wall Street to main street’s individual investor. Despite this, he says, "The real paradigm shift is from technology to humanity. I believe when the people take charge of their own financial destinies they become strong and more confident as individuals".

Part 2 of the book describes the 10 rules of Part 1 in real life. The author has quoted numerous cases where his rules have worked wonders. He tells of how a young couple in their 30s became a millionaire simply by investing in a planned manner and were able to secure their retirement earlier than usual.

The book should be useful to people of all age groups in service as well as self-employed professionals, even a barber. The more the awareness on social security measures, the more authors like Paul B. Farrel will be needed in India to hone investors’ skills.