Investment: Money Management

“Money is always eager and ready to work for anyone who is ready to employ it.”
― Idowu Koyenikan, Wealth for All: Living Life of Success at the Edge of Your Ability

Investment is the final step of money management

Investment is a means which helps a person reach his goal, through which he can decide how to meet his future expenses. In financial planning, if you have done health insurance, term insurance, emergency fund and savings, the last step is your investment. You can never reach your goal by keeping your money in a savings account. Every person has different investment goals. Some have short term goals and some have long term goals. There are no short term and long term goals. If you can achieve both the goals then what should be your strategy to reach that goal?

Investment plans Investment strategy (preparation)

1. How should you prepare your investment strategy? So that you can easily reach your goal and make your life easier. While preparing the strategy, it is very important for an investor to understand his needs, review his income and also see what is his age and how many people are dependent on him or the income coming into the house. Which is the source?

Investment strategy can be done in two ways.

Firstly  , interest is given as per guarantee in investment.

Another   investment which has ups and downs.

While investing, understand your requirement, also assess your income and also keep in mind what is your age and the number of dependents on you. Make your investment strategy accordingly and only then your investment will be right. For every investment, you will have to set your goal, you will also have to decide your time limit, how much money you need and after how much time you will need that money.

While investing, it is also important to keep in mind that what is your risk taking ability because the more risk you have, the greater the possibility of higher returns. You can choose the risk profile as per your choice.

First Conservative Investment: This investment includes fixed deposits, recurring deposits, national scheme certificates and government bonds.

Secondly, the risk in moderate investment is slightly higher than that of conservative investment. Here investors take the risk while keeping themselves safe.

Thirdly, aggressive investment, in which investment the risk is higher because the investor invests directly either in the share market or in real estate. In most of the aggressive investments, it is more convenient for a person under the age of 50.

ASSET ALLOCATION

While investing, when you divide your investment among different assets, it is called asset allocation. Asset allocation is different for every person, considering his risk and benefits, when someone sits among his investors like stock, mutual fund, gold real, When estate ETF invests in assets like bonds and FDs, it is called estate allocation. While doing asset allocation, set your goal and to achieve your goal in investment, you have to give both your time and patience

Diversification

While investing, it is important for any investor to keep in mind that he should not put all his savings in one asset, like no person should keep all his savings only in FD or should not put all the money in one stock or only You should not keep all your investments in property only, this will be beneficial in that your risk gets reduced a bit and if there is a recession in one asset then the other asset gives profit.

Don’t over diversify

While investing, an investor should also keep in mind that there should not be over-diversification in his portfolio because due to over-diversification, you may get delayed in achieving the goals you try to achieve. Over-diversification means that you are investing in the entire market. Due to which it may be difficult to get the desired profit in investment.

risk capacity

Risk Capacity means how much risk an investor can take while making his investment or what is his risk appetite because even if one person loses ₹ 1,00,000, it will not make any difference to him whereas for someone else Even if a person suffers a loss of Rs 1000, he may face trouble. The risk taking capacity of every person also varies according to age. Younger people have more capacity to take risk. They are more vulnerable to market fluctuations. Can bear well because they can devote more time to their investments, whereas an elderly person who is old and is nearing retirement or has retired, then such a person should not take too much risk in investment. Because if the need of money occurs during the market recession then investing for it will become a loss-making deal. Here every investor should decide the risk taking strategy by looking at his position, his age and the condition of his money.

Investing is a complex process, it would be better if you invest after taking the advice of an expert so that you can achieve your desired goal.

Note –  http://www.thevibrantray.com  does not provide financial advice in any way. You must consult a financial advisor for your financial management.

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