The two doctors

Suppose you go to a doctor to consult about some problem you have. You are told to do nothing, just eat well, exercise and you'll get well again. Contrast this with another doctor who prescribes four tests and a scan and then prescribes a few expensive medicines.

How do people react to these two situations? When I narrate it like this, most of you would sense where my preferences lie, but in the real world, when the patient feels that there is something wrong with him or her, and when no one else is paying any attention, it is natural to prefer the second type of doctor. Everyone likes their problems taken seriously; everyone prefers the feeling that 'something is being done.'

A lot of people, when faced with an experience like that with the first doctor, would even resent paying a fee because the doctor did not do anything. The result is that the marketplace pushes doctors towards the second type of approach. There's not much financial success and growth in the second model.

It's pretty much the same with investment advice. I've been seeing this first hand for years. Some acquaintance approaches me for investment advice. I look over the investments, listen to the person's financial requirements and then say that everything is fine; keep doing what you are doing − no action needed. Quite often, I can see the disappointment in their faces. They feel I wasn't listening at all and have not bothered to think carefully. Surely, they feel their portfolio can be improved but I'm not bothered.

I'm well aware of this problem and our team at Value Research was acutely aware of it when we were conceptualising the Value Research Premium service. We are the first type of doctor. Of course, it's not like that the first time most of our members come to us. At that point, many have portfolios that need heavy repairs and so at that point, we are like the second doctor. Then if the member uses our algorithmic system, we become like the first doctor.

Members enter some financials details, their existing portfolios and what they want. Our system essentially tells them what to do. If they follow that, then that's it. Our job becomes essentially that of support and reinforcement.

Do nothing
This whole idea of continuous action is actually quite misguided. When I think of the actual activity that should take up most of the time of investors, then it should be nothing, provided they have built up a good portfolio. For most − almost all − of the lifetime of an investment, you should be doing nothing about it. The bulk of the activity (although that's not the right word) of investing is waiting. Waiting for months and years while your investment grows, powered by the monthly drip-irrigation of your SIP instalments.

Almost all services of this type that are being offered by others do not have this approach of 'don't fix what is not broken.' There is constant pressure to act, generate activity, generate something that sounds like advice and action. That's the second doctor in action. And to be fair, such services do succeed in attracting a lot of new customers because action feels like work is being done. In sharp contrast, the kind of inaction that we eventually recommend indicates that the difficult work has already been done, concluded.

Of course, this is not all that there is to Value Research Premium. It's a large set of features that enhance the familiar presence of Value Research Online that you have known all these years. Let's take a look.

Portfolio Planner: These are custom portfolios that are suggested to you as part of your Premium membership. The algorithm that we have evolved takes into account your goals, your income, your saving capacity and a number of other factors.

Analyst's Choice: Often, investors want to choose their own funds for some particular investment purpose. There are about 1,600 available to you and even with the help of our rating system, it's a lot of work to zoom in to the right set. However, that won't be a problem for you because as a Premium member, you will have access to Analyst's Choice. Instead of the 40 official types of funds, we have created eight investor-oriented categories which match precisely with the actual financial goals that you have. In each of these, my team of analysts and I have carefully selected a handful of funds that will serve you with the best outcomes.

Portfolio Analysis: This is the heart of the concept that I have described above. Only a few members are starting their investing from scratch. For most of you, a big question is whether your existing investments fit into your goals? This is often a hard question to answer because there are a lot of implications of switching old investments, not the least of which is taxation. In the Premium system, you can get an evaluation and a suggested fix-list based on our expert teams' inputs.

A lot more
Of course, those are just headline features. There are a lot more that will help you keep track of your investments, returns, diversification, taxation and practically everything else that will help you achieve your financial goals. Take a look at Value Research Premium for the full details. You could also check out Value Research Stock Advisor.