Personal Finance Learnings from the Pandemic

1
Personal Finance Learnings from the Pandemic..
Never waste a good crisis Winston Churchill
2
1) Prepare for the worst..
2
Emergency fund
Health insurance
Life insurance
Plan to survive reality. Future filled with
unknowns is everyones reality Morgan Housel
3
2) Your savings are the ONLY thing you can count
on..
3
YOUR MONEY CYCLE
Income Expenses Savings Or Income Savings
Expenses Choose well..
Save money and money will save you
4
3) Living is not expensive, lifestyle is..
4

• Lockdowns taught us that we dont necessarily
  have to spend more to have a good quality of
  life
• Spending money just to show people how much
  money you have is the surest way to have less
  money
• Ego lt Income
• Beware of lifestyle inflation
• Impulse purchases, entertainment, shopping are
  all controllable and discretionary expenses
• They can instead be channelized into savings and
  long-term wealth creation

Stop buying things you dont need to impress
people you dont even like Suze Orman
5
4) Can you count on Low Falling FD Rates for
your Savings?
5
Consumer Basket 1990 2000 2010 2015 2020 CAGR
TOTAL SPENDING PER ANNUM 23,759 68,923 151,279 280,064 427,619 10.1

Price of gold, INR/10 grams 3,409 4,528 18,268 26,335 50,104 9.4
Units ( Grams) of gold to consume my basket 70 152 83 106 85

BSE SENSEX 730 4,659 15,585 26,557 47,751 14.9
Units of BSE-30 Index to consume my basket 33 15 10 11 9

Fixed Deposit Basket Index Value (Value of initial investment Jan 1, 1990 1000) (SBI 1 Year Deposit Rate) 1,064 2,220 3,550 4,628 5,814 6.0
Units of FD Basket to consume my basket 22 31 43 61 73
14
SBI 1 year FD rate
12 10 8 6 4 2
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008
2010 2012 2014 2016 2018 2020
Source FD Interest Rates Compare Fixed Deposit
Interest Rate Today (myloancare.in) Bloomberg,
SBI, Data as of July 2021 Past performance may
or may not sustained in future Quarterly
compounding and Tax rate on Fixed Deposit assumed
to be 30 Inflation takes from the ignorant and
gives to the well informed Venita VanCaspel
6
5) Survival of the fittest
6

• Debt is a disadvantage
• Income not guaranteed
• Debt repayments guaranteed

If you think nobody cares if youre alive, try
missing a couple of payments Earl Wilson
7
6) Liquidity marketability are hallmarks of a
good asset
7
Cars or designer watches or clothes are not
marketable. They are things not assets Money
locked into land and property or other hard
assets is not easily realized in a
crisis Financial assets like shares and mutual
funds are liquid and are very handy
8
7) Focus on what you can control..
8
WHAT WE DONT CONTROL
WHAT WE CONTROL
How much we save and for how long
Asset allocation
Investment returns
WHAT WE RARELY FOCUS ON
WHAT WE ONLY FOCUS ON
9
7) Focus on what you can control..
9
WHAT WE DONT CONTROL
WHAT WE CONTROL
How much we save and for how long
Asset allocation
Investment returns
WHAT WE RARELY FOCUS ON
WHAT WE ONLY FOCUS ON
10
How much we save
10

• Managing your lifestyle and maximizing your
  savings can have the same impact on your net
• worth as increasing your investment returns
• And its more in your control

For how long we save
Time in market beats timing the market. The
former is in your control Start as early as
possible and be patient to enjoy the effects of
compounding In the graph, we compare two people
who invested 10,000 with no additional
investments and earned a 10 return every year.
The only difference between the two people,
however, is that Person 1 began investing at age
20 and Person 2 began at age 30
Please mention this is for illustrative purpose
only to explain the concept of compounding
11
7) Focus on what you can control..
11
WHAT WE DONT CONTROL
WHAT WE CONTROL
How much we save and for how long
Asset allocation
Investment returns
WHAT WE RARELY FOCUS ON
WHAT WE ONLY FOCUS ON
12
12
What is Asset Allocation?
Asset allocation involves dividing an investment
portfolio among different asset categories like
equities, bonds, property, commodities and cash
13
Why Asset Allocation matters..
13
There have been years when equity markets had a
brilliant run, years when only bonds were
dependable, and years when gold shined the
brightest, and these periods did not typically
overlap
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Sensex 49 Sensex 49 Gold 26 Sensex 83 Gold 23 Gold 32 Sensex 28 Sensex 11 Sensex 32 Bonds 9 Bonds 13 Sensex 30 Gold 8 Gold 16 Gold 28 Sensex 11
Gold 20 Gold 16 Bonds 9 Gold 24 Sensex 19 Bonds 7 Gold 12 Bonds 4 Bonds 14 Sensex -4 Gold 11 Gold 5 Sensex 7 Sensex 14 Sensex 17 Bonds 1
Bonds 4 Bonds 7 Sensex -52 Bonds 4 Bonds 5 Sensex -24 Bonds 9 Gold -5 Gold -8 Gold -7 Sensex 3 Bonds 5 Bonds 6 Bonds 11 Bonds 12 Gold -3
Past performance may or may not sustained in
future The chart ranks the best to worst
performing indexes per calendar year from top to
bottom Data as of July 2021 Past performance
may or may not be sustained in future. Based on
SP BSE Sensex Domestic Gold prices and CRISIL
Composite Bond Fund Index Source Bloomberg
Imagine someone holding an all equity portfolio
in 2008, or holding none in the equity rally
that followed?
14
2020 A Reminder On Virtues Of Asset Allocation
14
Past performance may or may not sustained in
future
15
Combine Asset Classes for better Risk Adjusted
Returns
One assets down cycle is balanced by another
assets up cycle
15
Risk-Return Equity Debt Gold Equity Debt Equity Debt Gold
CAGR 11.13 11.13 12.80 7.18 11.45
Annualized SD 9.37 13.45 22.02 3.27 17.34
Maximum Drawdown 21 36 56 6 25
Sharpe Ratio 0.524 0.365 0.299 0.293 0.302
Time frame is November 2004 to July 2021. The
period is taken from 2004 since the asset
allocation weights are calculated based on
normalizing the historical monthly equity and
debt indicators. Given the normalization time
frame used in the strategy, data availability for
certain parameters beyond the time frame analyzed
was a constraint. Compiled by Quantum
AMC Equity-Debt-Gold in ratio of 40-40-20.
Equity-Debt allocated in 60-40 range Based on
Sensex Index, Crisil Composite Bond Fund Index,
and Domestic Gold Prices Note Past performance
may or may not be sustained in the future
The most diversified strategy yields similar
returns with the lower volatility, compared to a
pure equity strategy
16
Disclaimer Terms of Use
The data in this presentation are meant for
general reading purpose only and are not meant to
serve as a professional guide/investment advice
for the readers. This presentation has been
prepared on the basis of publicly available
information, internally developed data and other
sources believed to be reliable. Whilst no action
has been suggested or offered based upon the
information provided herein, due care has been
taken to endeavor that the facts are accurate and
reasonable as on date. Quantum AMC shall make
modifications and alterations to the performance
and related data from time to time as may be
required as per SEBI Mutual Fund Regulations.
Readers are advised to seek independent
professional advice and arrive at an informed
investment decision before making any investment.
None of the Sponsors, the Investment Manager,
the Trustee, their respective Directors,
Employees, Affiliates or Representatives shall be
liable for any direct, indirect, special,
incidental, consequential, punitive or exemplary
damages, including lost profits arising in any
way from the data/information/opinions contained
in this presentation. The Quantum AMC shall make
modifications and alterations to the performance
and related data from time to time as may be
required. Please visit www.QuantumMF.com to
read scheme specific risk factors. Investors in
the Scheme are not being offered a guaranteed or
assured rate of return and there can be no
assurance that the schemes objective will be
achieved and the NAV of the scheme may go up and
down depending upon the factors and forces
affecting securities market. Investment in mutual
fund units involves investment risk such as
trading volumes, settlement risk, liquidity risk,
default risk including possible loss of capital.
Past performance of the sponsor / AMC / Mutual
Fund does not indicate the future performance of
the Scheme. Statutory Details Quantum Mutual
Fund (the Fund) has been constituted as a Trust
under the Indian Trusts Act, 1882. Sponsor
Quantum Advisors Private Limited. (liability of
Sponsor limited to Rs. 1,00,000/-). Trustee
Quantum Trustee Company Private Limited.
Investment Manager Quantum Asset Management
Company Private Limited. The Sponsor, Trustee
and Investment Manager are incorporated under the
Companies Act, 1956. 30th August 2021 Mutual
fund investments are subject to market risks,
read all scheme related documents carefully.
17
Thank You
17