Generation Need Shift – Survival to Growth to Enjoyment

Generation Need Shift – Survival to Growth to Enjoyment

I was just thinking about life , demographic changes and its impact on present day society and lifestyle . Have human being changed ? Is todays younger generation a different human being than my fathers generation .

Do we remember Maslow’s hierarchy of Needs ( see below )

·         Physiological Needs. The physiological needs includes the basic needs that man needs for the survival of his body which food, clothing, air, shelter

·         Safety and security Needs

·         Love/Belongingness Needs , family , friends

·         Self-Esteem , prestige , feeling of accomplishment Need

·         Self-Actualization ,creative activities , realising full potential need.

This Maslow’s hierarchy need when made was a step by step progression in the life of a human being . But when I evaluate this I find its not in a single human life but has spaced itself in 3 different generations – father , son and grandson in Indian context.

Our father generation – Most of them took job as it served the basic mean for survival ( Roti , Kapda and Makan ). The permanent nature of job also added security and safety . Belongingness and love was an integral part of society . They hardly looked beyond this . Whatever success they got they were happy so very few really strove for higher accomplishment and for most sense of contentment existed . Individual value system, behaviour was main factors for esteem and respect from others which was a high priority . they derived self actualisation more by laughing freely , celebrating festivals , meeting in family functions i.e stress free life  

Our generation – We saw a shift  from safe and secured government job and started moving toward private job . Basic need and safety and security was a requirement but not necessarily a priority . The belongingness and love which was to come from family friend slowly started shaping into business and professional interest and gains . Family time got replaced with long working office hours . Esteem slowly started getting replaced by greed of money so everything acceptable for some . Last 2 decades now money is main relative and friend for many . Accomplishment means more flats , properties and assets . Self actualisation for many is now holidaying abroad , watching movies , dining , partying etc or spending time on TV , internet , social media.

Next Generation ( Todays Youth ) – Do they really need to worry about psychological need ? . Parents have already purchased few flats for them , have built assets to enjoy life . Formal study has been replaced by hobby centric study . For many study abroad is the motto . safety and security is nothing to worry as “ Paisa hai to koi chinta nahi “ . Their life and its essence starts from 3^rd level. Social media plays a big role in its execution . How many really care for esteem ? They live in pragmatic world where not much of emotions are seen in any relationship . They adopt to new realities of life and move on n . They don’t hold the baggage of past for long and venture new things which excites them  . They find self actualisation in creative things ( Tik Tok , stand up comedy , netflex ) .

Well these are the shift generation wise from survival to growth to enjoyment . But what shift one might see in generation to come i.e after todays generation ?

If they start from self actualisation level as all the earlier needs have been generated by their earlier generation then what will be their definition of self actualisation ?

If it’s a reality that older generations are being ignored or some unfortunate ones thrown out of homes or left to feed themselves or the younger lots happy settling abroad leaving their parents here only what next left now to happen in family?

Today one has to pay even for the very very basic needs ( food , water and now fresh air to breath ) . News is fresh oxygen parlours setting up their shops and with level of pollution increasing what one can expect further ? So are we going to see new form of needs in Maslow’s hierarchy ?

Watch the younger lots on road – engrossed in their mobile while walking on road that not even noticing a beggar or old man or a sick person on road . Their only encounter with such emotions if any on reel scenes ( movies ) and not in real scenes .

Why this analysis ?

If each one of us love our children and seeing the changing lifestyle if we feel that our same beloved children might be facing an unimaginative distress when they become old then who is responsible for all this ? Its our generation only . We initiated all the changes , we accepted all the changes , we introduced to them all the changes and so only we have to undo some of the wrong changes .

Make them to understand how to earn basic need ( don’t build too much wealth for them ) , let them fight for their own safety and security . teach them cultural, social , human values and not only IT led values . Let intelligence be real and not make world dependent on artificial intelligence only. let them understand the real love , happiness . relationship emanating from humanity . Teach them to explore their inner self through meditation  .  Lead them to path of real and natural Godly self actualisation and not worldly self-actualisation .

If we fail to undo our own mistakes then our children when they pass their prime and face distress in latter part of their life they will only blame us .

Its sometime to ponder and act…………………………….

Zee Business Mutual Fund Helpline 18 Nov 2019 Mr Prakash Ranjan Sinha ...

In future return from Equity Mutual Fund in long term may not be as high as of Past

In future return from Equity Mutual Fund in long term may not be as high as of Past

Generally investors , distributors and analyst compare fund return for the period say 5,7, 10,15,20, 25…. Years on year to year basis and draw the trend  . Our expectation of return is based on that and we believe will get the same . As we move ahead my understanding is it will reduce going forward . For example lets say if I got 18% CAGR for last 15 year holding I will end up less than 18% in next 15 year .

My assessment is based on some facts and logics

·         The nos of stocks available has been increasing in the stock market. We have 3 market caps – large , mid and small . Though the number of universe in large cap remains the same i.e 100 the valuation of companies are higher than what they were 15 years back . In other words overall market cap of top 100 companies has increased . Now as the valuation go higher and higher the percentage return can not be the same . e.g if stock X was priced say 400 , growth of 25%  means prices becoming 500 . But if the price becomes say 1200 expecting price to become 1600 ( i.e 25% might not be so easy ) . In India most equity investors refrain to go for long term for the stock whose valuation has gone up. The general psychology of investor is they do see upside in a good company but not willing to stay invested for long term as they have entered at a very high price . So upside in large cap companies are there but will not maintain same growth percentage .  Also many of these today large cap were mid cap some years back or even small cap many years back . The rate of growth will not remain same as the base of growth ( price or earnings) grows . Today periodically some stocks are moving in or out from large cap basket . Now those entering in have already risen up on valuation and those going out have saw reduction in valuation . Those moved in again higher valuation becomes a limiting factor to some extent as explained earlier but those moved out creates not so positive image and investor again are a bit cautious for long term perspective . May be watch and gain by trading on short term . In Mid cap earlier the universe was 500 now reduced to 150 . This reduction of universe itself can create lesser trading opportunity based on short term price volatility . In Small cap the universe is very large but large universe has no relevance in fund management but how many stocks they are researching is important . Now again since research findings are almost on similar variables , similar methodology findings will not be having much of differentiating factors . Higher return will again be a function of tactical calls by fund manager . Also with reduction in total expense ratio some expense flexibility has been restricted by SEBI .

·         There was a time when many AMCs were striving to reach break even level  . Once reached and generating good profit top AMCs have moved toward now increasing their AUM at a lower cost . They are putting more emphasis on platforms and direct option . Now since decision making is left more or less to investors who will be averse to volatility , the Fund Managers will be more inclined to protect short term downside risk than taking advantage of short term profiteering opportunity . It simply means allocation will have more long term strategic intent and less of tactical biases than earlier times. No AMC  wants volatility is return should create volatile AUM as that not only leaves large number of dissatisfied investors but also puts contact redemption pressure . So fund will prefer to go for constant good return than chase for higher return .

·         We are in information age . With quick and smooth flow of information even trading activities also brings some sanity i.e we may not see higher volatility in stocks than past and that will also bring lesser volatility in equity fund performance .

·         Now Indian stock market have integrated with other economies . Many stocks are traded at different stock exchanges in other part of globe. Information are analysed on real time basis with the use of better technical tools and technology . This will nullify any price differences existing in different markets . Some markets will factor in information in much better manner and those inputs will be of big use in Indian market and so arbitrage opportunity or return on price mismatch reduced further.

·         Also as the return from Bank FD , G- Sec ( debt ) reducing the risk premium ( return of equity MF less risk free security ) will also either remain same or might reduce also . This means return from equity might reduce in comparison vis a vis past data .

Investors also needs to moderate their return expectation in percentage terms for long term holding . Indian equities will still deliver premium over debt on return side as our economy and industries are still in growth path and it has a long way still to go .