Charoenjit Chantarasiri – Use Asset Allocation Framework to Overcome Your Behavioral Biases

Sep 22, 2020

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Charoenjit Chantarasiri has been an investment consultant at Kasikorn Securities in Thailand for the past 10 years. He holds a bachelor’s and a master’s degree in finance from Thammasat Business School. As an investment consultant, Charoenjit advises retail investors in various equities, fixed-income, derivatives, and mutual funds products.

He also runs Charoenjit’s Podcast, which he started in 2019 to help retail investors in Thailand. He podcasts in Thai and covers everything there is to know about Thai listed companies. His podcast is climbing the charts because of the value he adds.

“Be a confident investor. Don’t let today’s price scare you from buying an asset.”

Charoenjit Chantarasiri

Worst investment ever

Charoenjit started his career as an investment consultant in 2010, two years after the global financial crisis. He would advise his clients to forget about equity and try to make the most profit.

The gold trend

At that time, gold was one of the assets whose price was on an uptrend. Many of Charoenjit’s clients were interested in investing in gold, and so he had to monitor the gold market as well.

Failing to take his advice

Charoenjit saved his money in a savings account and equity. He watched as the gold price continued to go up as his clients kept investing in it.

Charoenjit remained hesitant to invest in gold. In no time, the price of gold was at a record high of 26,000 baht from 17,000 baht. For a short period, the price went down to 23,000 baht. Charoenjit still didn’t bulge.

Jumping onto the bandwagon, albeit too late

When the price of gold moved up to 25,000 baht, Charoenjit now felt afraid of missing the train and decided to buy it at nearly the peak price. Soon after he purchased gold, the price ran a little bit more to around 26,000 baht. But after a while, the price dropped sharply. The price remained between 18,000 baht and 22,000 baht for about four years.

Throwing in the towel

In early 2018 Charoenjit decided to sell his gold and look for another investment choice. He sold it for only 19,000 baht.

In 2019, just a year later, gold prices went back to an upward trend rocketing to a record high of 30,000 baht in 2020. If only Charoenjit had been patient and confident in his decision to invest in gold, he would not have missed the opportunity to make huge returns.

Lessons learned

Use the asset allocation concept

When getting into an investment, look at it as a part of your portfolio and not as a separate entity. Don’t invest in something just for the sake of it or just because it is the new trend. Ask yourself if the new investment will improve or ruin your portfolio.

Consider investing in gold

Consider having a small portion of gold in your portfolio. This could be between 5% to 30%. Holding gold could help your portfolio be well-diversified and protect its value.

Be a confident investor

If you are a confident investor, you are more likely not to miss out on good investment opportunities.

Andrew’s takeaways

There are no rules in finance

There are no laws or rules in finance, so you can never be sure. Today, you may confidently say gold is not a good long term investment. But then tomorrow things change. The truth is that it is tough for all of us to detect when that change is happening.

Unrealized losses are real

A lot of times, we say that unrealized losses are not real. But the fact is that the best way to look at a portfolio is to use zero-based thinking that lets you ask the question, “If I didn’t own anything, what would I allocate to this today?” It’s a tool that will help you let go of the past.

Don’t let emotions get in the way

It’s easy for us to get emotionally attached to an investment. Always try to let go of the feelings you have about your winners and losers.

Actionable advice

Diversify your portfolio using the asset allocation concept.

No. 1 goal for the next 12 months

Charoenjit’s number one goal for the next 12 months is to create more quality content through his podcast and hopefully have over 10,000 followers from every channel. He wants to be more beneficial to investment companies.