Before you move onto investing in various financial instruments and blindly following your financial advisor, it is best if you could make your own personal checklist.
First, categorize your investments in to long term goals and short term goals. Doing so, you will get an idea as to what are your needs and wants. Accordingly, you can decide as to how much portion of your salary needs to be invested.
Second, Re-categorize your goals into 3 categories:
Trust needs:
These include needs pertaining to your family, for example, child’s education, buying a first house, gold for your wife, retirement etc.
Reserve needs:
It highly important of you to create a reserve such as a contingency fund or an emergency fund, that can help you during period of emergencies. In these unstable job conditions, it is important that your fund is able to finance your expenses for at least 3-4 months.
Luxury needs:
As the name suggest, needs which relate to luxuries as in, a foreign vacation, or purchasing a second house etc. These needs are best fulfilled when you are able to get yourself out of any kind of debt like a personal loan, home loan etc.
Once these criteria have been checked in your check list, the next step is to decide your assets class.
Your asset class has to be decided upon the following factors:
For fulfilling your long term needs, it is best to invest in equity class. But if the long term period is in the bearish period, then you can decide to go for vacation locally but in case of bullish markets the opportunity can be fully taken advantage of. For short term needs, investments through the SIP route can followed. MFs, FDs etc can be considered.
Once you have decided your asset classes and have started investing in them, the next step is to ensure that you revisit the investment. Evaluate the performance of an asset class. Be careful about the fund/stock selection and how they are performing compared with the benchmark/peer group. And re balance accordingly, if necessary.