Golden Rules of Investing
Introduction:
Investing money and investing money with proper planning and strategies, can bring a huge difference in one’s portfolio in the coming future. Proper planning of investing money will lead to a better future life and financially independent feeling in one’s life. So, let’s look into some golden rules of investing…
Disclaimer: These are based on my point of view, in addition to what most popular investors keep on saying from their learnings. Please do your research before taking any decision for your future.
1. Be an Early Bird
As early one will start investing, the more time he/she will give money to stay in the market. More time will lead to better compounding of money over the period of time, regardless of what amount of money one has started with.
If you are in your early 20s, no better time will come to start investing. Even if you are now in your 30s, it's always better to now than to never. Calculate your goals, and invest accordingly.
2. Be Goal Oriented
Whenever people invest, the major problem comes when they don't have their goals listed and do not know how much to invest and when to stop or increase the investment. Linking investment with your goals will make your life more simple.
Goals will allow you to plan accordingly for future events. You will be planning your investments or SIPs based on the goal that you will have in the back of your mind. Withdrawing also becomes an easy task when the goals are synced with investments.
3. Diversify
Always diversify your investments. Diversification can be of various types.
For Equity: it can be within various caps (large, medium, and small). Or it can be within equity and debt funds. Or it can be FD, PPF, etc.
We all know the saying:
Do not keep all your eggs in one basket
4. Do self-investment
Do not take help from agents. Do your research and invest sensibly. When going through agents, they will make you invest in regular funds, which will have an expense ratio higher as compared to other funds (as it will include their commissions as well).
5. Risk Management
Investing in equity is already a risk, but that doesn’t mean that we should invest all our money in FDs and PPF. In MF also there are some which are very risky, some are of medium risk category and some which involves very low risk. So we should be sensible enough while taking risk with our money. Investing in different portfolios and balancing the things out should be the main motto of our investing life.
6. Reviewing portfolio
Reviewing your portfolio on a regular basis is the key point that every investor should keep an eye on. There are two reasons behind the same. First is, you should not keep on investing on a portfolio where you do not have trust on. Secondly, if you feel that one of the sectors will grow with exponential rate in coming future, you should not miss out an opportunity on the same.
Conclusion:
These points are the key of any investor success. Its only on the investor that how obediently he/she follow these rules, which will decide his/her future, lifestyle and financial independence.
I hope you have enjoyed the article. Please give a CLAP if this was somewhat helpful for you. Your valuable suggestions are always welcome. Happy Learning!!!
