Oct 21, 2013,16.58 IST
How to take right investment decisions at right time?
Whether you are buying an insurance policy or investing in mutual funds, do you take the right investment decisions at the right time.
Whenever you feel low or the time is not in your favor, the first thing that gets affected by this feeling is your decision making process. Factors like wavering social or financial condition, fear of losing money or the regret of investing in the wrong scheme together handicaps the decision making ability of an individual. In fact, this is the situation across the globe.
Many investors are not willing to invest their money in the stock market, accusing the present market condition and wish to wait for a clearer picture.
Whether it is for purchasing a product or investment, individual postpones decisions. This behavior directly or indirectly causes decision palsy in your investing life, as well. In order to avoid this condition in the near future, it is worth reading the below suggestions.
• The market doesn’t wait – Most investors wait for a perfect market to invest. In reality, there is rarely a perfect time. The market fluctuates every minute and estimating the right time may push you towards a darker area. To find an ideal time, you will have to wait forever.
Also, many investors and market experts cite, “the market is volatile” now. In fact, you will seldom see a still market, fluctuating is its nature. In the anticipation of a right time, you may be missing a golden opportunity. Just like time, even market doesn’t wait for anyone.
In the expectation to make more money, you may lose even what you have. Too much thinking may also affect your decision. Therefore, in order to make right investment decisions, you need to take time to think. But you should not take too much time to think. Think over it!
• Invest with a plan – It is true that factors like political unrest, economic condition, change in government rules and foreign market regulations impact the market results. But these things are beyond our control, and allowing them to rule our position is like inviting a BIG LOSS.
Although we cannot control these factors, still we can do what is in our hands – making investments based upon our unbiased plan and a well thought out asset allocation. While the investment returns may not be in our hands, the perfect decision making right definitely is.
If you are expecting an amount from a source next month, draft a plan to decide on where (mutual funds, gold, equities etc.) and how much (partly or wholly) you will invest. Don’t miss the chance!
• Great returns despite economic turmoil – This has happened many a times. If you Google the records of global and Indian equity investments of the past thirty years, you will find a surprising element. In most cases these equity asset classes have offered exceptional returns despite economic turmoil. Therefore, it is rightly said one cannot predict the exact market nature.
Therefore, determine the asset allocation. Invest in a staggered manner in the risky asset classes like equity. Rebalance the asset allocation periodically. Don’t delay these by any means.
Even you can be the next richest person in the world if you learn to make decisions and dare to follow it. Take your stock market investment decisions based upon the performance record of your favorite shares or equity funds.
Procrastination in taking investment decisions will definitely not make you a successful investor. Work on this habit and overcome it. Delaying your investment decisions is equal to denying your investment returns. Take the right investment decisions at the right time.
The author is Ramalingam K, CFP CM is the Chief Financial Planner at holisticinvestment.in, a leading Financial Planning and Wealth Management company.
Planning to invest in mutual funds? Here's help
Here are a few fund options to invest your money