This season has long been regarded as the month of new beginnings. Monsoon brings a unique perspective on investing, and here are some of the investment lessons that one could learn and implement during their journey of wealth creation:
1. Watch for the potholes on the road (Risk Management) Before the monsoon season, the government prepares for rain. It rebuilds the roads, covers the potholes, and makes provisions to avoid rainwater clogging the regular route. Similarly, you also need to plan to avoid the risk effects of investing in the financial world. The first step in managing investment risk is understanding your risk tolerance. Your desire to take risks and your capacity to do so together define your risk tolerance.
2.Don’t leave without an umbrella (Protect what you have) Just as an umbrella protects you from the rain showers. Its necessary to protect your wealth from any unfortunate event like medical emergency or accident. Have sufficient Term and Health Insurance.
3. Take care of your health (Rainy Day Fund) While the rainy season offers a respite from the long summer, it also presents a number of health risks. There are high chances of waterborne diseases like cholera, typhoid, sore throat, cold, and fever. During such times, we take preventive measures to avoid any health issues. Similarly, you need to maintain a Rainy Day Fund as a safety net to protect your financial health.
4. Drive slow but steady in rains (Market Volatility) This is a crucial lesson to learn because, just as you would be extra aware while driving on a rainy day. Avoid making any panic redemption; more importantly, staying invested in the long run is how you may generate a high return on investment.
5. Follow the predictions but trust your instincts (Informed Investment Decisions) Sometimes the prediction may say that the rains are unlikely, a thunderstorm or light showers. But sometimes, the predictions are less than accurate. Not everyone would have the same portfolio and financial goals as you. So, you need to make decisions for yourself based on your risk profile, investment horizon and financial goals. Happy to help You.
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Stating From 2000 SIP to creating corpus of 300 times monthly expenditure
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