Out of the many who make resolutions for the new year, a lot wish to be financially independent, many wish to invest more and some wish to start investing. In the end, only a few fulfill their resolutions and the rest add to the new resolution makers next year. Let us help you with a few practical resolutions which will help you to make the New Year happy and prosperous. Read 5 key resolutions for investors.
Start investing now
‘Jo kal karein, woh aaj kar!’ Investing is a choice that you must make at the right time and the time is always right. Especially for growing economies like ours, long term value investing is a great tool for wealth creation. It is definitely great to start investing at an early age but it is also important to sustain the investments and continue. This year, start investing in right tools for wealth creation. It is a disciplined approach of wealth creation that builds foundation for your future. Read our article on consequences of delay in investing.
Nurture the habit of investing
A general study says, if a person smokes 90 cigarettes a month for 10 years, he spends about Rs.1,08,000/- (considering cost to be the same) and on the other hand, if he invests that amount monthly for 10 years, he earns far more with compounded interest. Another study shows, if you had invested 1 lac in sensex in 1984, it would have become 1 crore in 30 years, i.e 100X multiplication. (Read the study here http://goo.gl/iWvRIL). There would be ample of examples as such. In equity market, compounded interests are boosters in your long term wealth creation process. As said earlier, investing is a habit of making right choice. So this year, plan to nurture your habit of investing.
Invest in long term value assets
Value investing is long term investing! Saving is must for short term goals, while for long term, investing is the right way. Learn the difference between savings and investing. Wealth is created exponentially by staying invested for a long term. Take the example of the 100X study mentioned above. Precisely, as the economic changes have been supporting growth, the long term investments help multiply your wealth. So this year, commit yourself for a long term investment for your financial goals.
Focused Portfolio
From our childhood we are trained to be focused to achieve the higher productivity. It works the similar way with any wealth creation tools. Too much of diversification is difficult to manage and keep a track of. However, be it debt, equity, real estate or any other medium giving adequate attention gets difficult. It is advisable to focus on the less diversified portfolio which is adequate and manageable. This year, diversify your portfolios adequately but not unnecessarily. Read our article on secrets of focused portfolios.
Research before investing
Knowledge is the best weapon. It is the most important investment everyone must make. Try and learn everything about your investments. If you are investing in equity asset class, learn as much about the companies as you can so that you understand the worth of your investments for a long term. Updating your knowledge periodically gives you a perspective to anticipate the future performance. This year, ensure your long term investments are wiser. Read our article on characteristics of a good investor.
Disclaimer: The illustrations are used to explain the concept and should not be used for development or implementation of an investment strategy. Past performance may or may not be sustained in future.
