Financial planning is easier if your philosophy of investment is clear. Here are 25 mantras every investor should keep in mind in order to make smarter investment decisions.
1) Equity is not the only asset class we have.
2) Mutual Fund is a way of investing, not an asset class.
3) Asset classes are differentiated based on the risk associated with each of them.
4) Gold is not something that we consume. We can love it; we can depart it too. It is an important asset class for investment.
5) Do not fall in love with any investment. Sometimes all of them deserve a profit booking.
6) Do not time the market, because we do not know the peak or the trough.
7) SIP or any systematic or value averaging investment plan is ideal if you are not following the market from beginning till the end. It is the best method even otherwise.
8) No one is the smartest investor. One can be an intelligent investor.
9) Patience is better than money when investment is concerned.
10) An intelligent investor does not follow the herd. He or she leads the herd.
11) Judge a financial product on how it behaves when the cycle reverses.
12) Anything going away from its expected value, either way, will come back like a pendulum. So, believe in the expected value.
13) When investing in equity, think of risk first.
14) When investing in debt, think of security first.
15) When investing in gold, think of purity first.
16) When investing in real estate, think of liquidity first.
17) Equity is for capital appreciation. Fixed return instruments are for regular returns.
18) Rent is considered as a return from real estate. It should be inflation-adjusted.
19) Booking income tax deductions can be an encouragement for saving. It cannot be a cause of investment.
20) Life goals are the cause of investment.
21) There are some prerequisites to a successful investment. For example, emergency funds, life insurance or medical insurance. Because these are the unplanned hindrances to future asset creation.
22) When we have our goals, we do not see obstacles.
23) Financial goals always have a present value and a timeline.
24) Inflation has the most important role to play to achieve our life goals.
25) It is not how you behave when you gain over expectation, it is how you behave when you lose. This is the ultimate mantra one can learn from Warren Buffet’s investment behaviour.
Follow these mantras and you’ll become a successful investor who is easily able to achieve all financial goals. Get in touch with us to know more.
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– Aditi Nundy
