Uncertain about long term investing? Try running! I am a big fan of comparing the formula for successful long distance running with long term investing. There are so many similarities that jump out at us, its hard to ignore.
No bonus, increment this year? Doesn’t mean no SIP Along with lower annual inflow from your profession, your market linked investment values are perhaps looking lower too. What should you do about your market linked investments now?
Previous year returns are the worst guide If you invest based on what happened last year, you’re in for a surprise at the end of the following year; returns may be similar or may be nothing like what you expected.
Is your life an EMI repayment schedule? There is pressure to keep upgrading that car, house and lifestyle; pressure that will lead you to continue increasing your EMI rather than the assumption of reducing it. Pressure that will keep you tied to a job whether you like it or not.
Three financial planning mistakes that you must avoid When you get down to it, several nuances can come up in your financial planning equation and you have to be careful not to fall prey to some common traps.
Making more money is also a goal Can one desire to simply make more money? Nothing wrong with this goal, because making more money means creating wealth. Creating wealth can help you sustain a lifestyle that you want through the ups, downs and the beyond the end of your regular earning years.
How debt mutual funds can help with better tax planning Debt funds are useful in creating that part of your investment portfolio where you are looking for stable returns with low risk. Typically, this is filled with bank deposits, however, if used wisely debt funds can not only deliver better returns but also more tax efficient returns.
Goals take away uncertainty To create wealth, you have to include market linked investments like equity in your portfolio. While doing so, rely on well-defined goals to tide over uncertainty.
This is how compounding works Compounding returns, especially in growth assets like equity can help you create wealth provided you give it enough time and hence, start early.
Child’s education goal: equity risk, debt stability or both? Are equity investments too risky to cater to your child’s education goal? Should you then invest only in the stability of fixed income investments? The answers to these questions depend on your estimated expense amount for the goal and secondly, the time line for when you will need this money.
Does a repo rate cut matter to your investments? In the latest monetary policy review, the Reserve Bank of India cut its benchmark repo rate by 35 basis points of 0.35% to 5.40%. You are right in thinking that your housing loan EMI could look lower if banks follow suit and lower their lending rates too. But what happens to your committed equity and debt fund investments?
Should you never change your asset allocation? Asset allocation however, is not set in stone. Neither should you keep changing it too often. What is the right balance? That depends on your financial objectives.
