Hello Readers!
Diwali is around the corner, and if I am not wrong, many of us are busy cleaning their house. People are using their free time to spring clean their homes. Well, why not along with cleaning house, clean up your investment portfolio too!
I mean it's Diwali, your investment portfolio must also be cleaned, this will have two benefits, your investment will look more authentic and linked to your goal, secondly, you can get yourself rid of investment behavior biases which do you more harm than good.
Yes, it is a fact, we all have some kind of investment behavioral biases, that stop us from objectively analyzing what works best for our money. This Diwali, let’s us get over these simple biases and make our investment portfolio look smarter and return generating.
You Can Do It Yourself But Not Always!
With the introduction of digitalization in the investment sector, it has become simple and easy for one to invest in any investment instrument. Right from investing in mutual funds to fixed deposits and even opening your provident fund account can be done without any help. However, when it comes to investment advice, still the best option is taking help from an investment expert, even if you are an experienced investor.
Taking assistance from the expert becomes more prominent if the investor has a day job and has very little time to analyze and do research on market trends. Even if you understand the volatilities in market-linked investments and strategies used in fixed deposits, it is still recommended to take help in portfolio allocation, so that you remain tide with your risk capacity.
Holding On To Bad Decisions In The Hope Of Reversal, Not advisable!
While selecting a mutual fund scheme to invest in, we often end up picking those funds that in the future don’t go along with our goals or are no more linked to our objectives. However, the sooner we admit these mistakes, the easier it is to reverse the outcome.
Your mistake might become a blunder if you still remain stuck to that fund scheme, taking your choice the right one and it’s only a matter of time before the tide turns. You might lose the value of your investment more and more if you still hold that fund in the hope of reversal.
Remember, a good quality fund may perform low but will bounce back with time, but a bad quality investment doesn’t turn better with time. It's best to get rid of these bad quality investments and use the proceeds to invest in a better opportunity.
Not Reading The Fine Print
We are habituated to analyzing things before buying them, be it clothes, any gadget, shoes, or any commodity, in fact, we do analyze the quality of socks before we purchase it. Then why we skip analyzing every fine detail related to the financial product before we purchase it.
Product manufacturers focus on selling their financial products. It is your responsibility to make sure you don’t just fall for the sales pitch and also read the details of the product you are buying. Details of cost, risk, tax implication, and expected return are most important to track.
Do fix your investment period that is for how long you will remain invested and before that do check whether the financial product you are purchasing is defined by a mandatory lock-in period or not.
Basically, go through all the details and information about the product written on its brochure and if you don’t get enough of any detail, enquire about it from the distributors. If the financial security you are investing in doesn’t come with this level of detail then, definitely don’t invest in it!
For any kind of query, you can contact us at Shri Ashutosh Securities Pvt Ltd., 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 of future returns).