Why Common Sense Matters in Investing

The goalpost for the use of common sense in investing shifts with time.

- RAJAS KELKAR

It has a direct correlation with the prevailing knowledge and financial innovation. In the old times, people saved on physical assets like precious metals or jewelry. It was common sense to hoard them.

With the evolution of money, it became the way to save. People started hoarding cash and building savings in a bank account. Investing was all about buying real estate. Yet again, hanging on to something that you can touch physically or that is tangible. That continues to date. Although there is a visible increase in savings and investments through financial assets, the penetration of financial products in India remains low. It is perhaps why businesses selling financial products, such as mutual funds, insurance, and banking services, are booming in India. The future of common sense savings and investing is driving the current market value of financial services companies.