Hello Readers!

Do you think you are a good investor, and you have good investing behavior? Well, being an investor, doesn’t define your returns from investment, but how you manage your investment and what is your behavior towards your investment sure does.

Your investment behavior is important as it impacts your investment to a great extent and ultimately defines your returns. Many investors are cautious towards taking a risk and thus move towards, fixed income-generating investments and pick only the more stable return products to invest, but in their journey, they often miss the opportunity of long-term wealth creation.

So basically, it’s important to measure whether you have good investing behavior or not. Here I am discussing some ideas through which you can decide whether you have good investing behavior or not.

Familiarity bias

This is the biggest behavior trap. People most often plan their investment, in instruments in which their parents had invested or in instruments where their friends are investing, for them, others investment stories are the parameter on which they decide where to invest but not their financial goals or risk profile.

Indian families have indulged in real estate, gold and fixed deposit investing for generations; it has worked in certain periods. Hence, the assumption is that it will go on working in the years to come.

Basically, people keep following the herd and restrict themselves from doing experiments with their investment, and earn more, than the traditional investments that give them fixed returns, which is not enough to accomplish their goals.

Here people should try to look to new and efficient ways of investing like in market-linked Mutual Funds, where they can create a good corpus to accomplish their goals, in the long run.

Return seeking

Well, earning a good return is almost everyone’s priority, for investing their money in different investment instruments. If the real estate market is doing well, everyone wants to buy a second and third property. If equity is doing well, you will not want to sell, even though your portfolio risk could be high.

People always, link their investments to return earned, that should be avoided, it is always advisable that investments should not randomly follow the return, rather they should follow your goals, and multiply your investments, as per your financial goals.

It may happen that when you started your investment, your mutual fund was giving good returns, but when you are ready to sell, things can look very different. Here I would like to say, if you decide to redeem your investment, do check whether it is giving you a good return to accomplish your goal or not, and if it is performing low, wait for the market to rise again and then only redeem it.

Here the best behavior that you can adopt is, choose investments that fit your goal. Stay invested for long periods, look for flexibility, access to information, ability to redeem when you need the money and ability to grow your wealth.

Being regular

This is the best habit one should adopt when they are investing in their goals and dreams, being regular with your investment. Regular investing lets you experience the entire market cycle in assets.

Being regular to your investment gives you the freedom to choose the funds, where you want to invest, on a regular basis. Basically, being regular with your investment helps you to diversify your portfolio and Diversifying your investments to a certain extent can help you reduce risk. Moreover, regular investing helps you save more and invest more in wealth creation.

Well, in order to build a good corpus, to accomplish your goals and dreams without any financial hurdle, one needs to opt income-generating the above-mentioned good investing behaviors.

You can contact us at Shri Ashutosh Securities Pvt Ltd., for any assistance, we are here to help you in any way possible.

Happy Investing!

(Mutual Fund investments are subject to market risk Illustrations are for example only, there is no guarantee of returns. Past performance is not an indicator/guarantee to future returns).