For last year’s words belong to last year’s language and Next Year’s words awaits another voice. Wish you all a very Happy 2014!!! Hope this year brings lots of prosperity, good health and happiness to you and your dear ones.
Every passing day becomes our teacher and teaches us a lot.
If we talk of 2013 from investments angle, we will find it was a year of turbulence and not a great year for any asset class may it be real estate or gold or share market or fixed income securities. Equity market started in 2013 with optimism from 2012 where sensex gave over 20% returns in 2012. However in 2013 the overall return from sensex was just 9%. But the entire scenario seemed very scary with fluctuating dollar and gold prices. What amuses me here is that when gold prices saw a correction from 30k to 25k during the year it was seen as a great buying opportunity but we failed to see the same opportunity when the sensex fell. What 2013 taught us is that it’s not the markets which failed to give returns; it’s we who refused to make returns.
Time and again, we have been saying that rather than tactical investment decision, the investment decisions should be focussed on financial goals.
All of us work hard to ensure that we have enough money at the end of the day. We invest this money in a variety of investments so that it can make even more money. We put money into various instruments without even considering the purpose for keeping them. But is it the right way????
Let me ask “Is there a plan of action that guides your investments???”
Strange, never thought of it !!! As they say there are no shortcuts to success and for your investments to make sense and make more money you just need to follow some basic guidelines.
Investment planning is like using gears of vehicle. You use high speed gears like 5th or 4th gear if you are away from your destination and low speed gears like 2nd or 1st gear if close to your destination. To reach your financial goals choose the gear that suits the time available for the goal.
For your short term goals you should consider fixed income products like debt funds or FD’s and for your long term goals you should consider investing in equity mutual funds.
For example if you intend to buy a house two years from now which is a short term goal then you should go for capital protection and avoid volatility; hence consider investing in FD’s or debt funds according to your tax liabilities.
Or if you are saving money for kid’s higher education or their wedding which is almost 10-15 years from now then you should go for equity mutual funds as equities are the best bet for long term. It’s better to let your money go along the roller coaster rides and make more money.
Do you have a Plan B????
Plan B is often understood as a backup plan. Hence insurance should not be missed out in discussion. Starting from 2013, IRDA has brought about many changes in life insurance policies giving more stress on customer centric products. We have been saying this that insurance is the most widely mis-sold product in India. Now regulator is also able to smell bad things happening in this industry.
It’s important to be covered and hence go for only those insurances which you need such as term, medical and accidental.
Choose your Financial Advisor carefully
The credit for success of pandavas in the great war of mahabharat goes to Krishan Ji who was their guide. In order to be successful with your financial planning seek help of a good financial advisor who is there for your long term benefits. Solid Wealth creation is a marathon and not a 100m dash.
“What the new- year brings to you will depend on what you bring to the New Year”. With 2014 an election year markets would be volatile. But remember it would change nothing if you have long term goals.
As we say “With investing you do better if you do less”. Sit back, relax and have a fun-filled 2014!!!!