Posted By: Admin
The year 2022 is almost upon us. We are stepping a bit back from our office commitments and focusing on all those personal aspects that were left behind and that need some thoughts & actions. We present the three points that we believe will pave the way for a superlative investment experience.
Emotions & Investing : Emotions & Investing are bad bedfellows. So it is extremely important to identify if your investment decisions are laced with emotions. These can be quite detrimental in the longer run. Selling when the markets are in chaos and buying when things appear euphoric is a bad way to invest. One needs to steer clear of emotions and do investments based on one’s needs and timeline( investment horizon) and stay the course for optimum outcome. Example : So if you find that you are unable to understand the logic of how Cryptos give such stupendous returns, then stay out of it, without letting greed get the better of you.
Goal based investing : One of the ways of achieving the above is to follow a goal based investment approach of identifying one’s goals and thereafter looking at specific investments to help you reach your goals in the best possible manner. It is important to make sure you map out all your goals and provide cost escalation for inflation in the long run. Example if your son’s Post graduation need is estimated at say 50 Lakhs and is expected 8 years away,factor in Inflation say at 7% per annum so that you better be considering to reach an investment corpus of Rs 85 Lakhs by that time.
Discipline : The process of Periodic investing, while appearing to be very ordinary, can actually give extraordinary results as long as it is pursued in well performing mutual funds, with discipline over a reasonably long period of time. So instead of trying to find that one investment that may provide extraordinary returns in the short term, it is easier to be disciplined and do regular investments that can create extraordinary wealth in the long term. While the former is uncertain, the latter is predictable and evident.
If one is able to imbibe these three points in managing their investments, I am sure 2022 will be a superlative year for them in their pursuit of better investment outcomes.
By Babu Kishnamoorthy
Mutual Fund investments are subject to market risks, read all scheme related documents carefully.