Some investor may have a different economic background but, the investment habit or pattern makes them different from other investors. In some cases, understanding the basic concept of saving and investment makes the real difference.
When it comes to important decisions like money matters, you do not act on friends opinion. You need to dig out the facts as it can make the difference. Its all about planing a feasible investment strategy that works for you.
One investor is more confident in real estate investment, and he came from a background where the traditional financial investment products have more weight compare to equity products. This investor made some investment in equity products, but a significant portion of saving goes to real estate investment.
Now another investor not so enthusiastic about real estate investment but carry some investment in the traditional investment products liked fixed income products and want to initiate some equity investment based on some objective in the coming future. The investor is very clear that a few thousand of saving each month maybe diverted to equity investment and that can continue to next 15 to 20 years.
I always believe that investor should develop a pattern for himself/herself that works for the investor.
As an investor, you should emphasize more on planning your investment. An investment plan might serve your purpose of investment. You need to develop a simple answer to your investment needs. Simple pattern or plan might serve you, but the complex one might deviate you from your target. A personal discussion with your financial advisor helps you to design a path that serves your purpose of investment.
Each small step you take with an understanding that it is the foundation of your investment pattern that you are going to develop and maintain in a disciplined but straightforward manner will make you more confident about the outcome of your effort.
The best investment product might not serve your purpose unless you decide to make a good investment plan that you are going to follow.
One investor decided that he is going to invest 2 lakh in 3; large-cap stocks in a staggered manner that he/she will do in next one year. The simple plan makes it clear that he will not act as a active trader and follow a simple plan where the investor has selected three stocks based on a personal discussion with the financial adviser and a small part of the amount will be used to buy the chosen shares each month.
The plan makes it also clear that he or she can manage risk in equity investment.
Take the example of another investor who recently started investing in ELSS fund for taxation purpose.
The investor knew very well that although the lock-in period is just three years compared to other tax-saving instrument but in a medium to long term horizon may gain more due to high equity exposure.
You, as an equity investor, must acknowledge the fact that return from equity investment may vary based on the various factors that may not be in your control. Still, a long term investment plan helps you to understand different cycles of ups and downs that enables you to understand the risk you are taking to accomplish your investment objectives.
Anwesh Sachin is a registered investment adviser(RIA)
RIA-INA300003905
Disclaimer- The information and views shared here is not personal advice. I may have shared the same views with my clients. You should consult a SEBI registered investment adviser (SEBI-RIA) before making any investment decision.
