What is investing?
Investing refers to the act of committing money or capital to an endeavor with the expectation of obtaining additional income or achieving a goal. E.g. Bank Fixed Deposit, Mutual Fund SIP, Insurance Policies.
Who should Invest?
Everyone should invest, as investing is an important step in wealth creation which should be amongst the important goals of one’s life. Investment avenues can be chosen based on certain demographics of investors like age income stability, no of dependents etc. Investing smartly allows an individual to reap good returns and mitigate financial concerns arising when he or she is no longer employed.
Why should you invest?
You should invest your wealth to grow and to achieve certain goals related to money. For e.g. if one is planning to buy a house or expects children’s education expense coming up, one must plan and invest so as to achieve the desired goal, as without investing the money earned will not grow rather depreciate as inflation would slowly but surely erode the money.
When should you invest?
The earlier the better! this is the golden rule in terms of investments, as on investing early one allows time to compound one’s invested capital to give handsome returns in the longer run. Also investing in suitable financial instruments also allows one’s capital to mitigate the eroding effect of rising Inflation.
Where do you begin?
Since investing requires parting with your hard earned capital for a specific time frame in the hands of others it’s always wise to take the assistance of an experienced financial firm which will guide you each step of the ladder of wealth creation.
What are the avenues available for investment?
In India there are numerous avenues available for investment popular among them are Real Estate, Commodity, Art and Debt and Equity products.
Why is it important to read and research well before Investing?
As explained earlier investing requires you to part with your hard earned money for a short or long duration and it will be directed in an investing instrument for a specified duration of time. Hence it is extremely vital that one reads and researches well of the avenue where he/she would be investing his money, not doing so could probably result in the investor having losses or missing good wealth creation opportunities.
What are the Do’s and Don’ts to be always kept in mind while Investing?
- Start as early as possible.
- Prepare an investment plan and proper asset allocation.
- Research well and invest.
- Control your emotions.
- Look at achieving the large picture of wealth creation with patience.
- Always keep track of your investments.
- Never blindly follow media reports.
- Don’t fall prey to stock rumors, hot tips.
- Never try to precisely time the markets.
- Always be realistic about returns.
How do I become an Expert at Investing?
Becoming an expert at investing is a continuous process and one should take light of the words of famed American economist and investor Benjamin Graham who quoted “if you are shopping for common stocks, choose them the way you would buy groceries, not the way you would buy perfume” this basically implies that an investor should always look at making choices over what is needed in his/her portfolio to achieve long term wealth creation rather than looking at short term gains. Making and evaluating such wise choices will surely help him over a period of time of acquire expert proficiency.