Quotes

Disclaimers and Notes:

1. Brief quotes may not cover various nuances or the language may not be precise. Occasionally they misquote what I actually said (in some case the misquote had a massive error, so I have not listed the article here). So please take them with a pinch of salt. Also I may or may not agree with the entire article

2. I have stopped updating this page since December 2024

3. Prior to December 2024 also there are too many quotes. So, I had put only a subset of them on this page

 

“Any time is a good time to enter US equity [Feeder] funds from a diversification point of view,” says Avinash Luthria, a Securities and Exchange Board of India (Sebi) registered investment advisor (RIA) and founder, Fiduciaries... The Reserve Bank of India (RBI) has imposed restrictions on foreign investments, creating complexities. “Each time the investor wants to invest, he needs to find out whether the fund he is keen on is accepting money or not, and whether it is through the SIP or the lump-sum route,” says Luthria... Be mindful of tax differences. “Foreign equity funds attract long-term capital gains tax at 12.5 per cent only if held for more than 24 months,” says Luthria... Luthria, however, cautions against selling to rebalance, given the difficulty of repurchasing US funds.

Published in Business Standard in November 2024; This article is behind a pay-wall

 

[White collar] Gig workers [i.e. Freelancers] don’t have a fixed retirement age. “This flexibility makes them believe they can work longer to make up for their lack of savings. What they don’t appreciate is that health issues could make it difficult to extend their work life beyond a point,” says Avinash Luthria, Sebi-registered RIA and founder, Fiduciaries... Luthria suggests gig workers should avoid insurance-cum-investment plans as they have high surrender charges. Finally, avoid overspending on child’s higher education and jeopardising your retirement. 

Published in Business Standard in October 2024; This article is behind a pay-wall

 

"Go for a well-thought-out equity allocation. “Choose an equity allocation that will allow you to remain invested even if the market falls by 50-60 per cent,” says Avinash Luthria, a Securities and Exchange Board of India (Sebi) registered investment advisor (RIA) and founder of Fiduciaries... Luthria suggests arbitrage funds for those in higher tax brackets (in place of debt funds). “These funds’ net asset values (NAVs) grow in a stable manner and they are taxed as equity funds. You can also defer taxes until you sell, unlike fixed deposits where interest is taxed annually,”he says... Selling equities can trigger taxes and exit loads. To avoid these, consider directing fresh systematic investment plans (SIPs) into underperforming asset classes like fixed income or gold (and pause SIPs into outperformers). “This method allows you to gradually return to your target allocation without incurring costs,” says Luthria. 

Published in Business Standard in October 2024; This article is behind a pay-wall

 

"If the fee structure is completely flawed, then the advice is guaranteed to be completely flawed. The % of AUA fee structure is completely flawed and it is not possible to overcome those flaws.
The most common 1% p.a. of AUA fee structure is intended to get the client into an engagement when the client is relatively young, and their net worth is low. Hence the relatively young client will not be able to realize that by the age of 60, they will be paying 33% of their annual household budget as annual fees to the RIA. Such an RIA is hoping that by the time the client realizes this, it will be too disruptive for the client to end the engagement with the RIA.
Even a lower fee like 0.1% p.a. of AUA is deeply flawed. If the AUA is defined as the entire net worth of the client, then the client will be tempted to hide their fixed deposits, PF, PPF and real estate from the RIA so as to reduce the fees. This will ensure that the RIA will not have sufficient information to make sensible saving, asset allocation and investment recommendations. To fix that flaw, if the AUA is defined as excluding fixed deposits, PF, PPF and real estate, then the RIA will be tempted to recommend minimizing fixed deposits, VPF, PPF and real estate, so as to increase the RIAs fees.
Any % of AUA fee (including one that has multiple slabs) becomes more appealing for the RIA as the client gets older and has a higher AUA. This tempts the RIA to ensure that clients cannot terminate the engagement. To do this, the RIA will be tempted to create a very complicated portfolio e.g. with an unnecessarily large number of funds / bonds / PMS / AIFs etc. Such a portfolio will result in very high product fees and taxes. The RIA will also be tempted to trigger all mutual fund transactions and discourage the client from learning to do so. This will ensure that the client is dependent on the RIA for all investments / redemptions."

Published in FreeFinCal in September 2024 

 

"Inflation is a hidden and blunt tax imposed by the government on people. It is blunt because though the government causes it, the government cannot precisely control it"... “This is caused by people not understanding the difference between nominal returns (for example, FDs pay seven per cent pre-tax interest) and real returns (after subtracting six per cent inflation, FDs pay one per cent pre-tax interest). Applying a 30 per cent tax rate, the nominal returns on FDs drops to 4.9 per cent and after subtracting six per cent inflation, the real returns are negative 1.1 per cent,” says AvinashLuthria, SEBI registered investment advisor (RIA), Fiduciaries.in, an investment management firm.

Published in Business World in June 2024; The online version of the article is an excerpt from the full print version of the article 

 

 

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