Things to know before investing in festive season

Anil RegoRight HorizonsThe season is festive. Greetings are exchanged, families feted and friendships renewed. The ease of communication has brought a new dimension to the celebrations – now the history, tradition and meaning of the festival is delivered by email or whatsapp instead of conveyed at the grandparent’s feet.Shopping, in a relatively prosperous generation, with access to the best of global goodies is simpler than ever. Shopping malls have everything you imagined, and many products you did not know existed, available in gaily decked up stores. You can walk in with a little piece of plastic and walk out with a truckload of gifts. Bargains are also available online, enticing you with great offers from the front page ads in your newspaper.This is the season too when businesses traditionally gave bonuses to their employees. You are fortunate if you have the good fortune to receive a ‘Diwali Bonus’. A good part of this would go into the shopping and possibly some eco-friendly lighting and fireworks. Those who do not get a bonus during this season would have planned some financial outlay to ensure your home sparkles as brightly as your neighbourhood.It is hoped that the festivities do not set you back financially. Do ensure that you have a festival budget, and stick to it. Pay your credit card dues in time. Let your credit card debt not impact the rest of the year – note that this is the costliest debt you can take on.Another beautiful tradition is the new investment during Diwali. An order for a long term stock investment is a great old way of making the festival bring joy years later. This is a practice that has enriched investors for decades. Many investment firms suggest a list of stocks that they expect will fire up the portfolio during the next year. These could be a good place to start your hunt for a Diwali multi-bagger stock as the recommendations come with analysis and rationale for investing.Change your shopping basket this year when you plan the family Diwali. Gift wrap something that the recipients will treasure and enjoy many years in the future. This year’s different gift could be starting a tradition for your family. Instead of a ‘Made in China’ toy or other bauble, or even buying a single stock, present each member of your household with a portfolio managed by experts – through a mutual fund. Gift a Systematic Investment Plan (SIP) to each one, with a twist. Let those below 40 have a pure equity fund, those between 40 and 55 a balanced fund and those older an income fund. With this you have both diversification and risk management. The young will enjoy the long term growth that equity gives, while more debt in the portfolio will provide stability for the comfort of the older. The children especially will enjoy the learning of money and investments in a practical manner. When they find the investment paying off in the down payment of the house they buy when they start a family, or paying for higher education, or anything precious the blessings of this festive season will be a joyful memory.This year let our greeting of prosperity be practically experienced. A happy festive season to your families and you.