This Diwali, Welcome Samvat 2076 with These Money Management Tips
October 20193 min read
While we are saying goodbye to Samvat 2075, we at Investica collated Investors’ experiences and market learnings to bring you some tips which will help in welcoming Samvat 2076 on a positive note.
This is the time to reflect on the investment mistakes we did in the past and learn from them; a time to clean up our portfolio to align with our needs and a time to build undeterred perseverance to stick through the investments even in volatile periods.
First and foremost, do not get the FOMO (Fear Of Missing Out) because of all the “Diwali Picks”
“Diwali Picks” by the market experts are supposed to help investors to build the portfolio. Having said that, you cannot alter your portfolio every Diwali to include all of such Diwali Picks. Investing is a long term game and compounding only works if you hold your investments for at least 5-7 years. The ideal portfolio is supposed to beat the benchmark and inflation. If your portfolio is doing that without any of the “Diwali Picks”, there is no need to make any changes.
Additionally, there are some of the behavioral traits, which may come in your way of making money, Read more about it here.
Buy Paper Gold instead of Physical Gold
Gold has a unique significance for all Indians and Diwali is always incomplete without buying gold. Although this is difficult for many of the Indian households to agree upon, this Diwali the best thing can be to buy Paper gold. There are various ways to do that viz. Sovereign Gold Bonds, Gold Funds, Gold ETFs. There are multiple issues you may face while buying a Physical gold like purity, safety. But when you are buying gold in electronic or paper format you will not face such issues. However, limit such exposure to a maximum of 20% of the entire portfolio.
Clean up your portfolio to align it to your needs
Many of the investors hold too many funds/stocks in the portfolio in the name of diversification. Sometimes we buy a fund just because someone we know has it. This Diwali, the important exercise is to clean up the portfolio to make sure that you know what you hold and why you hold it. Every investment must be done with a set goal and investment period. Once you start mapping each fund to the goal, outliers can be easily identified. One thing to keep in mind while doing this is the cost impact of taking such actions. If you are selling a mutual fund, there might be exit load and tax implication in the process. Hence, take informed action with an understanding of cost implication.
Put in place a financial plan to keep you on track
As the famous saying goes “Most people don’t plan to fail but they fail to plan”. This Samvat 2076, make sure that you don’t fail to plan. With our day jobs keeping us busy, finances are usually overlooked. The importance of planning is only realized during the time of big expense. If all the predictable big expenses are planned beforehand then life becomes much easier.
At this point, allow us to let you in a big development happening in Investica. You will soon be able to do your financial planning using Investica with it’s Robo Advisory feature. This is our step towards simplifying your finances on your fingertips.
Last but not least, remember that every big market movement doesn’t warrant action.
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