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There are a few investor mistakes that are commonly made by most investors that could be fatal to a secure financial future. Catch them before any lasting harm is done!
We all make some investments or other. The aim is to build a better future for ourselves and our family. Some do exceptionally well, while some, instead of saving money their entire life, struggle to meet life goals.
Why is it so? What do successful investors do differently from the rest of us?
Let’s explore some common tendencies of investors at large; which turn out to be the biggest mistakes for our investments.
It is really important to understand what the value of our needs in the future be and to work out an investment amount needed to be invested, to reach that magical figure.
As the saying goes “If you don’t know where you are going, you would end up someplace.”
I think the market is very volatile at present. Let me get a better pay package; then I would start saving. I have rest of my life to worry about my retirement.
These are all the excuses we make today and pay the price for the same later. There is never a better time to start investing than today. External, future scenarios don’t matter. The earlier you start, the better the chances that you would reach all your goals comfortably.
It is equally important to stay focused on your goals and keep doing your regular contribution to its growth patiently. The moment you lose sight of your goals and stop your investments towards them; you would be taking two steps back. Remember “You got to nourish for your investments to flourish”.
Another mistake which an investor makes is not realizing how much risk one should take for which goal, and which instrument suites his individual risk appetite. Equally important, is to make the right asset allocation for the objective in question.
Choosing either a wrong instrument or a product not suitable for individual risk bearing capacity would both turn out to be a disaster! Either you would withdraw too early, or the investment would not be able to deliver, as per your expectations.
Another mistake an investor makes is that they start with a goal value in mind and choose an instrument which they think would help them achieve the goal. But during the course of time the goal value can change or the instrument performance may vary.
It is hence required to review the goal and the instrument performance over time. You must set the review timelines against each goal at the beginning itself along with your financial adviser, to avoid surprises at the end. Your timely review on the progress of individual goals and timely changes if required, would ensure reaching the goal value on time.
Save right, invest wise!
Cheers!
Image source: shutterstock
Hi, I am Shaily Shah; after a good stint of 14 years in corporate life,
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