As summer is upon us and most of us would have already started packing our bags to hit the road. Would it surprise you if I were to tell you that your investment journey is quite similar to your road journeys? Equity market has gone through a tough cycle over the last few years. Like in the past investors have panicked and many have given up on their financial goals and withdrawn from their mutual funds in panic; they have either stopped their systematic investment plans in panic. It is not the first time this has happened, and I can assure you this will not be the last.
Investing has become easier at the same time. Therefore over the years, investment has become not just a destination but also a bit about the journey. MoneyMindz, India’s First Online Financial Advisory Portal helps you see what can be learned from our road trips to make our investment journeys also as smooth.
If the journey is long, planning is the key
Do you know where the map is? You would typically carry a map if you are going on a road journey. This happens especially if you are going on a self-drive foreign holiday. You don’t want to be lost after all.
Well investing is pretty much similar. Your financial plan is your map. You certainly cannot start investing without a plan, else you must be putting money anywhere and everywhere without a direction.
You need to see convenience. Also your investment journey should also be comfortable. Do you hold an emergency corpus to fall back on while your investments continue undisturbed? You don’t need to dip into your savings every time there’s an emergency, else your money will not grow. Check f you invest in a paperless and digital way and how you are going to keep track of your investments. You should be able to monitor them periodically.
An experienced driver helps
Be it is a self-drive holiday or you aim to hire a professional one, the driver should be skilled and experienced to drive on highways.
In the same manner whether you invest on your own or hire a professional investment advisor, one has to be skilled and knowledgeable to navigate the markets. Advisor’s interest and your interest should be aligned. It helps if your advisor is empathetic and accessible.
Every journey comes with risks: manage them
A good road trip planning entails that we check the brakes of our car before we start. The car should be in a good condition; tires, wipers should wipers, oil etc. in your car before you start off?
You need to prepare yourself before your embarking on your investment journey. Either you opt to stagger your investments through systematic investment plan or invest in lump sum depend on how your income comes to you; salaried and regular income or business income that varies month or month. How well you manage your risks on your investment journey depends on what sort of instruments you choose to invest in.
If there are any road side breakdowns, would you have enough support along the way to assist you to, say, change your tire; repair your car and so on? It helps if your advisor is accessible.
Therefore if the above planning for your road trip also makes sense to you for your investment planning, then it’s important to map out your investment journey properly.
You need to find out that whether your advisor is offering the full suite of financial planning services like your risk profiling, a detailed financial plan, goal-oriented, solution-oriented investment vehicles, reducing market risk and liquidity risk, undertaking goal and portfolio reviews, doing portfolio rebalancing based on your risk profile? Make yourself clear that financial planning is a chain of events which are process led and missing out on even one of the links is catastrophic. Therefore a comprehensive financial advisor is the key to meeting your financial goals.
Not everything that is cheaper is better for you. You need to know that cost savings can be notional in the long journey of meeting your important financial goals. There will always a cost attached to quality service however, make sure that there is actual value that you receive for the commission / fees that you are paying for the financial advice you are receiving.
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