This is the mantra for your financial stability and success. Having pursued this path, it can ease all your problems that you might perceive to be as financial burdens for the future.
No matter how much ever short term may be the requirement for, be it to finance your foreign vacation or pay the loan amount on your car loan, link a financial investment to it. With this, you will get an idea as to how is your financial standing, how much you need to be investing and where.
Firstly, you need to start off by penning down, what your financial requirements, both in the short term and in the long term. Once that is cleared, get into investing in funds that match with the time you will be requiring your funds. For example, if you have a child who is in her preschool, it is advisable and expected for you to plan for higher education that is about 12 years ahead. So, investing in a fund that matures after 10-11 years and then moving it into a savings account where it can earn interest, is most sought after.
If you are a new investor in equities sector, opt for a balanced fund, where 35% of your investments will be invested in equities and the rest into debt. Although the returns will be lower than your counterparts who have invested about 80% into equities, it will guarantee you some amount of stability and you can switch over once you try and get the hang of how the market functions.
Make sure you always and only opt for investing, be it any mutual fund, through the Systematic Investment Plan route. This will develop you habit of regular savings and guarantee you tax benefits over a period of time. In order to exhaust all the profitable avenues of investing in Mutual funds, make sure you invest through SIPs.
Do not make any decisions based on other investors’ word of mouth. Mainly because, their investment goals and strategies may be completely different from yours. Also the type of fund, tenor and the amount that each investor invests may vary. Pick those funds that cater to your needs and whose risk can be borne.