The nature of my work in the finance world requires constant and consistent interaction with clients, and on several occasions, clients prefer to conduct their discussions over a drink. These compulsions have become more of a ritual these days. The similarities between finance and a cocktail are quite evident – to a keen eye, that is! What’s on offer is a collection of brews, flavouring and diluting solutions, some ice, sugar and salt. The basic ingredients of the financial world are quite similar. 

Finance is always a mix and one is never sufficient, quite like the drunken variety. For starters, the choice is often from an offering of products that are an “off the shelf” kind. Easy, plain vanilla investments like bank deposits and mutual funds, quite like the “harmless pint”. Low risk, low return variety, keeps you brewed as would a Jägermeister. A seasoned investor is a breed apart. He knows his choice of poison, prefers the raw nature of risk, and often is chilled out having been on the rocks more often than not. Has had his share of twists and turns, but stays true to his pick. Sticks to his limits and rarely goes overboard, in every circumstance.

Friends of Morpheus, you’ll find them in the shadows, far from the crowd.

Then there’s the sophisticated investor, the epicurean who prefers the rare & exotic as well as the fine unknown. He looks for the uncommon variety of risks that can offer long-term returns and can display a rare sense of abandonment as he awaits magnified returns from his deployment. Not the type seeking instant gratification, but ready to play the waiting game to win.

A bartender’s joy for his preference to experiment. – Blender’s Pride. 

Cocktails are an integral part of finance – whether we like to term it that way or not. A mutual fund is a concoction of  stocks and bonds put together by the Fund Manager, based on a theme. Portfolios comprise a mix of products based on the risk/ reward expectations of the investor and are constructed to suit individual preferences. Some like the cream, others bourbon, while others only prefer the Absolut. Product specialists in their so-called financial laboratories are forever attempting to conjure up a new product that will be rare, exotic and offer exceptional returns, leading to a breed of investment ideas termed structured products.

Shaken, stirred and tossed about are what investors experience in their quest for better returns as there is “no one flavour suits all”.

Just as preferences swing from Martinis to Mojitos, investors swing between risk and return, getting caught in a hurricane, sometimes.

Investment management is more of cocktail management. Profits cause the spirit to soar and sometimes even roar, while losses cause the spirit to become sore.

If such is the nature of managing money where irrational exuberance follows periods of rational realization, it is necessary to maintain a sense of calm as a money manager. Give clients a reason to celebrate and be like the bartender – stable, sober and suave. By the way, I am a teetotaler. Have been one thus far and am committed to remaining one to the end. My acquaintances, after their initial shock at doing business with a teetotaler, have now accepted the fact with easy, friendly banter. 

 The journey of investing is a long one like a bitter-sweet cocktail.

Savour it as you keep walking!  


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