We all make some investments or other. The aim we all have is to build a better future for ourselves and our family. Some do exceptionally well, while some; instead of saving money their entire life, struggle to meet life goals.
Why is it so? What do the successful investors do different, than the rest? Let’s explore some common tendencies, of investors at large; which turn out to be the biggest mistakes, one can make with investments.
Not knowing how much to save
It is really important to understand what would be the financial value of our needs in future or Financial goals and how to work out an investment amount needed to be invested, to reach that magical figure. As the saying goes “If you don’t know where you are going, you would end up someplace.”
Waiting for the right time to start
I think the market is very volatile at present, I do not understand investments, let me get a better pay package; then I would start investing, don’t have time; I will start soon, I have rest of my life to worry about my retirement.
All these are excuses you make and land up paying big price for them later.
There is never a better time to start investing then today. External, Future scenarios don’t matter. The early you start the better the chance you would have, to reach all your goals comfortably.
Lose sight of your goal after a while
It is equally important to stay focused on your goals and keep making regular disciplined contribution towards each and every goal. The moment you lose sight of your goals and stop your investments or do not pay attention when needed; you would be taking two steps back. Remember “You got to nourish for your investments to flourish”.
Ignoring risk profile and asset allocation
Another mistake which an investor makes is not realizing how much risk one should take for which goal and which instrument suites his individual risk appetite. Also, equally important is to make the right asset allocation for the objective in question. Choosing either a wrong instrument or a product not suitable for individual risk bearing capacity; would both turn out to be a disaster!
Either, you would panic and withdraw too early or the investment would not be able to deliver as per your expectations. in both the scenario, your life goals would suffer and you may not be able to fulfil many of them on time.
Not doing timely review
Another mistake an investor makes is, he starts with a goal value in mind and chooses an instrument; which he thinks, would help him achieve the goal. But during the course of time the goal value can change or the instrument performance may vary. It is hence required, to review the goal and the instrument performance over time. You must set the review timelines against each goal at the beginning with your financial adviser to avoid surprises at the end. Your timely review on the progress of individual goal and timely changes; would ensure you stay on track to achieve each one of them on the timeline decided.
Save right, invest wise!
Cheers!!
This article was first posted on our blog page on July 11, 2018 by the author.