Novice Money Management in a Turbulent World
As of February 2026, I’ve been investing for just seven years. I’m not an investment expert—just someone driven by curiosity and personal interest.
Situation around the world
Since Russia invaded Ukraine, the world has been at war for four years now. It’s six years if we consider COVID, which was no short of a war. The US president, Mr. Donald Trump claimed he deserved the Nobel Peace Prize, stating that he had stopped seven (or eight) wars. The Venezuelan president had been kidnapped by the US. President Trump last month demanded Greenland to be handed over to the US and threatened to send the US military in case Denmark did not comply. So much for peace. All these conflicts have started in the last 4 years.
As I am writing this piece, another war has started, twenty four hours ago. The US and Israel carried out attacks on Iran and Iran has struck back at US bases in the middle east. In a situation like this, it’s not hard to imagine a third world war or the use of a nuclear weapon. Maybe we are living through the third world war, we just have not confessed it to ourselves, and maybe the future historians will confirm this in days to come.
In the tech world, Artificial Intelligence (AI) in the form of Large Language Models (LLMs) have taken over the news. Since the launch of ChatGpt in November 2022, we have seen a plethora of AI models in the market. With each release a new claim and debate surfacing about a fundamental shift in approach to many aspects of human society. Every company in the world today is trying to automate operations using AI. Some are leading the race, others lagging behind are having FOMO and re-calibrating investment strategies around AI. The Indian IT industry, the backbone of India’s economy, is in deep peril. Its existence is being questioned which reflects in its stock price.
3Ts - Trade wars, Tariffs, Trade deals, are the new buzz words of the business world today. The business dynamics are changing. Gone are the days of liberalisation and free economies. Countries are in a race to formalise bilateral trade agreements.
Weaponisation of supply chains, critical minerals, semiconductors and rare earth magnets is a new form of arm twisting (re)discovered by China. It is forcing other nations to think. The West is realising delegating it’s manufacturing to China, India and other south Asian nations will not work going forward.
We are entering a great commodity cycle. The last one year returns of gold (+100%), silver (+170%), platinum (+140%), copper (+31%), aluminum (+20%) have dwarfed the index (Nifty, S&P, Nasdaq) returns.
The de-dollarisation trend has gained pace in recent years with central banks around the world buying record amounts of gold. The faith in the US dollar is dwindling. President Trump's tariffs and humiliating of world leaders on the global stage is catalysing the process.
What is my situation
I live in Bharat (aka India). I have been married for two years now, and I have a home loan. We are a family of four (my parents and us). The Indian middle class is a wide spectrum. I came from the lowest, can not say where I am in the spectrum now, certainly not where I was seven years ago and definitely far away from the other end.
My parents are financially dependent on me (us) to a large extent. As my parents grow older, the medical expenses rise. Apart from the usual diabetes, cholesterol, thyroid, the Indian middle aged suffer, my father had heart surgery last year and mother suffered backbone injuries a few years back. Many readers will already be in a similar situation or can relate.
My wife and I want to buy a car. It has become a necessity for us. But we have been postponing the purchase for a long time, convincing ourselves not to buy a depreciating asset.
I am a software developer. I have worked in three companies. All are product driven, claiming high growth, none are profitable. Fair to say, I work to help someone build his dream. I get paid in the process because investors pour in money with a hope to make a multifold return on their investment. My wife is also a software developer working for a more profitable/ stable (for the time being) organization.
Start up fundings happen because investors have access to easy money. Lower risk free ( the term risk free is debatable) interest rates persuade investors to invest in start ups promising high growth. Wars are bad for business. AI is a promising alternative to humans. Every time a war happens, or an AI CEO claims they are going to end the software engineering profession soon, my wife and I go into panic mode.
Prevailing wisdom around investing
I graduated in 2018 and started working with a very good pay. Within a few years, my pay saw a meteoric rise. The covid boom also helped. I got to know about Warren Buffet, Charlie Munger, Peter Lynch, Rakesh Jhunjhunwala, Radhakisan Damani, the greats of the US and the Indian stock market. Most had humble beginnings and made enormous amounts of wealth from investing. I read as much as I could and listened to as many interviews as possible. I spent weekends going through several Annual letters and financial statements. It took me some years to realise it is not easy to make such wealth, invest so much time into it with a full time job. Also, you can not make wealth without the tail wind of a bull market behind you.
The common wisdom says:
- Cash is trash.
- Invest in appreciating assets.
- Your investments should beat inflation.
- Gold has beaten inflation over time. You should have some exposure to gold.
- Gold is volatile.
- Real estate is best.
- Real estate is illiquid.
- Don’t take leverage. The middle class stay middle class because they take leverage to buy a home loan.
- Intelligent people take leverage and use it to buy appreciating assets.
- Cash is King. Buffet is sitting on so much cash (2025-26)
- Efficient Market Hypothesis - index investing is the best.
- Small caps and micro caps give higher returns.
- Small caps are risky
etc. etc.
What I think I should do
Opinions differ and situation matters.
A person’s situation influences his investment decisions more than anything. Yet he can and should listen other’s opinions.
What does wealth mean (to you)? - This simple question yields different answers depending on who you ask. For me, it is the security. I don’t seek wealth for vanity (at least today). It gives me comfort and a nice sleep.
Equity
I sold my equity investments in September 2024, to pay for the down payment of my house. The Nifty peaked around this time and has been hovering in the range since. It was not a genius stroke, a mere coincidence.
I don’t have the time and energy to analyze a lot of stocks. It is very difficult to find a multi bagger as well. Even if you find one, and you have not invested a sizable chunk of money in it, it won’t make much difference to your overall financial health. I think my personal portfolio should have only 4-5 stocks. This is the amount of companies I can track without much stress. The rest of my equity investments will happen through mutual funds.
Leverage
Is leverage good? - No & Yes
No - because it is a burden. If you borrow at high interest rates, you will end up paying so much of your future earnings to others.
Yes - leverage is good, if done smartly and you can borrow at a low interest rate. For example, my home loan interest rate is 7.1% today. SBI offers me a 6.4% interest for a 2-3 year Fixed Deposit. I can get a 7% interest on my 2 year FD in IDFC bank. My real interest rate comes around 0.1-0.6%.
Leverage is also a hedge against inflation. Widespread money printing by governments worldwide, particularly massive stimulus following covid, is a stealth tax penalising savers eroding the value of their cash holdings. But for borrowers, the dynamic flips, the loose monetary policy help subsidise part of their obligation.
Inflation is like a genie, once it escapes, it is impossible (highly improbable) to put into the bottle. The governments around are reactive to high inflation and often less proactive to prevent it. If inflation is 10% this year, the central bank puts all its effort to bring it down to 5% the next year. But it will never want to create a deflation of -9.9% to nullify the impact of last year.
Cash
Cash is trash. - This is what I used to think. I could not have been more wrong. Now I think Cash is King - even if it’s not a king it is a knight I want to have. With cash in my bank account, I would feel more safe every time I hear news of a war or AI release. My goal is now to have a highly liquid bank deposit amount equating 12-18 months of my EMI and expenses once I am done with the margin money payment. I think I should not repay any principal till this surplus deposit is created as the interest rate differential between my FD and loan is less.
Real Estate
I don’t have much opinion here. This is a highly illiquid asset. We have been struggling to sell some land in our village for a few years now. It is difficult to get a fair price and the right buyer. It is best to try to create a cash flow out of this asset like put it on rent, do agriculture etc. But the Return on Investment (ROI) will seldom match other asset classes. Investors can find solace if the underlying value keeps appreciating over time — although that depends on many external factors like location, infrastructure, and market trends.
All that glitters
In our Indian households, women tend to buy gold. That takes care of our portfolio exposure to gold. People can argue against the ‘making charges’ you have to pay on gold jewelries and the risk of keeping physical gold is not worth it. Digital gold is much safer and more liquid. Yet it is hard to convince your wife to not buy gold jewelries.
Commodities are highly regulated because governments are very sensitive to sudden spikes in commodity prices, as such increases can trigger inflation, disrupt economic stability, directly impact the cost of living for citizens which in turn will cost them elections. It is difficult to play the commodity cycle right. Even if you take the correct entry you may not get the opportunity to time your exit. My commodity exposure is limited to one/two PSU stocks with low P/E and high dividend yield. I am more concerned about protecting my downside.
Final thoughts
For the first time in seven years, I find myself leaning toward holding more cash—not because a prominent investor I follow is doing so, but because my current circumstances are pushing me in that direction. There may also be a psychological element at play. Since buying my home, I haven’t been able to build any meaningful savings. My bank account has experienced a steady outflow to meet margin obligations, and with the architectural work now in progress, expenses have only picked up further. After 18 months without adding to my savings, it’s only natural that I feel the need to create a cash buffer.
A year from now, I may view my asset allocation very differently. Investing is personal—there is no one-size-fits-all approach. Ultimately, my priority at this stage is stability and peace of mind rather than maximizing returns.
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