By Anupama Bhargava,
“Looking for a bride who is fair, slim and beautiful. She should be traditional yet modern. She should be working but should also look after the family”
A standard matrimonial advertisement in a newspaper would look some thing like this. In a nation exactly where individuals count on their spouses to have the ultimate qualities, it is not surprising to see them expecting the identical from their investments. They want it to be secure, give great returns in all industry cycles, beat inflation, save taxes and numerous more if it has to qualify as a great investment. Choosing a great investment is like deciding upon a life companion one desires anything in a single package!
Given the range of offered investment alternatives, an investor’s job becomes even more hard to decide on the most appropriate one. Add to this the ‘tadka’ of ignorance, herd mentality (deciding upon what your pal chose) or hunting for speedy signifies to get wealthy and one has the excellent recipe for a disastrous investment.
We have the glamour of investing in share industry on one hand and the staid boring Fixed Deposits on the other. Should one jump on to the fascinating but risky ride that crypto-currency promises or rather stick to safer havens that an investment in gold promises. Are mutual funds the “sahi” ones or is it the more sober insurance coverage plans that would enable one meet their monetary ambitions. The job of an investor is fraught with uncertainties and definitely not uncomplicated.
In the digital world, investing is uncomplicated. One can open zero charge Demat accounts that open up immense possibilities for an investor at the touch of a button, at virtually no price. All one has to do is open an account, chose an instrument and click and voila! The investment is made. As uncomplicated as it is to ‘invest’ your dollars, it is a lot easier to drop it on ill-informed selections that individuals are bound to make in search of generating a speedy buck. If it was uncomplicated to make dollars in the stock industry, every person would be wealthy.
It is not uncommon to hear about individuals losing their challenging-earned savings on investments that neither suited them nor had been understood by them. Recently, when the “dogecoin” fever was higher, investors, in particular millennials wanted a piece of the action that the cryptocurrency provided notwithstanding the immense danger that this investment presented. One could come across Instagram influencers advertising these get wealthy speedy schemes and the uninformed investor following these ‘role models’. Consequently, dogecoin lost 75% of its worth in a month.
Makes one wonder, is investment truly about increasing your savings on hot ideas or following trends or is it more to do with understanding your danger quotient, private monetary ambitions and other things that can only be assessed via a more human method. Is it comfort, price or return that need to be the criteria for deciding upon an investment or need to it be the comfort and suitability to one’s one of a kind requires?
We turn to an architect to design and style our home, we need to have legal assistance to settle our disputes so, it is surprising that when it comes to investing, we do not hesitate to invest on hearsay or generalized alternatives. Shouldn’t an investor rather look for good quality customized assistance when taking into consideration development of their savings rather than based on incomplete info garnered from a coffee shop conversation or an Instagram reel? Google could have answered your architectural concerns also but you need to have an architect to do it suitable! Good advisory comes with a price and an investor need to be prepared to shell out the identical.
Mutual funds present an investor the comfort of investing on line, accessibility to expert management at low price, flexibility of investment modes via sip or lumpsum, liquidity to exit, selection as per requirement and danger profile. Each mutual fund investor gets access to these advantages, irrespective of the ticket size. The tight regulations by SEBI which govern mutual funds make them extremely transparent. Each mutual fund document even comes with the mandatory warning “mutual fund investments are subject to market risk. Please read the offer document carefully before investing”
Makes one wonder why investing in direct equity (shares), futures and alternatives or crypto currency do not carry such advisory! For the uninitiated and also for the more seasoned, shouldn’t these investments come with a warning, offered their extremely volatile nature? Are these investments not “subject to market risk”?
It is a effectively-established truth that investing and trading are two distinct processes and for the amateur investor, lengthy term investing tends to make more dollars than brief term trading. Yet, when the markets are on an upswing as they are now, it is not uncommon for even the novices to jump on to the riskier alternatives, providing small cognizance to their danger appetite or monetary ambitions. Volatility is a function of the industry and what goes up will certainly come down one day and when it does, it is vital to be prepared with the security valves in spot.
For a more mature investment atmosphere that is transparent and enables an investor to make an informed selection, adjustments are necessary. As an investor, one need to decide on their investment alternatives meticulously based on requires, danger profile and monetary ambitions. It is not a great concept to chase returns without the need of taking the danger into consideration. The regulator also requires to step up and educate the investors on the many investment alternatives, their inherent danger and behavior. Only then we could move towards a method that is useful for all.
Only then can the investor dilemma be resolved!
(The author is a Financial Strategist and is a certified monetary Planner actively involved in spreading awareness on private finance amongst investors. Views expressed are private and do not reflect the official position or policy of The Spuzz Online. Follow them on facebook.com/BeeKayAssociatesOfficial/ and instagram.com/beekayassociates/)