March 19, 2018

Lessons of Investing

Investing can be a rewarding journey if done the right way! Here we present 5 important lessons of investing which every investor should learn / be aware of.

i) Start Early



The best time to start investing was yesterday. The next best time is today! The earlier you start, the better - Thanks to the power of compounding.

Rs 1 Lakh invested for 10 years @ 15% per annum gives Rs 4.04 Lakhs
Rs 1 Lakh invested for 15 years ~ 15% per annum gives Rs 8.13 Lakhs

ii) Be Patient



While tracking your investments is necessary, letting daily news and doomsday predictions will only make you uncomfortable and impatient. The more you listen to BUY/SELL recommendations on TV; the more you will feel tempted to churn your portfolio.

iii) Short Term vs Long Term



Do not invest your short term funds into your long term investments. Long term investments can be volatile in the short term and you will not be able to meet your financial goals if you keep breaking your investments to meet short term expenses.

iv) No Free Lunch



There is no free lunch. If you invest on the tips of your friends, family and others then you are definitely not being serious with your investments. Will they provide you with the quarterly updates, followup reports, etc? No matter how well your friend knows the promoter of the company ~ steer clear of investments which are not backed by any research.

v) Do it Yourself vs Advisor



You can either do all the research and stock selection yourself OR you can go for a fee-based advisor who can mitigate you through all the nuisances of investing. However, your advisor's approach to investing should be in sync with your expectations. Someone who gives intraday trading advice will not be able to guide you with the right long term investments!

Like we will not be able to guide those looking for:

i) Futures and Options advice
ii) Short term trading advice
iii) 30-40 recommendations a year

Who should choose us?

i) Those looking to invest for 3 years or more
ii) Those looking for fee-based direct mutual fund and stock advice
iii) Those looking to buy and hold high quality stocks - Investors who see stocks as a part ownership in a business and not as random digits blinking on a screen

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