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Here are some investment tips that can help you achieve the right portfolio mix:
Financial Plan: It is important to begin with the formulation of a financial plan designed to specify and help you meet your financial goals. All financial decisions should be made according to the particular goals and plan. This plan may include details of the various investment options, tax savings and insurance cover.
Risk Tolerance: Based on their financial health and attitude towards risk, investors may be aggressive, moderate or conservative. Aggressive risk takers aim at higher returns, while conservative risk takers protect themselves from price volatility by accepting lower returns. It is important to assess your risk tolerance before you make a decision to invest.
Diversification: As the saying goes, “Do not put all your eggs into one basket.” Spreading investments across various instruments, sectors and segments of the market reduces an investor’s risk exposure. The extent of diversification would depend on the risk tolerance of an investor. A well-diversified portfolio is better for investors seeking steady returns over the longer term.
Simple Portfolio: While diversification is advisable, one should limit the portfolio to the number of instruments one can handle.
Focus on the Long Term: The investment horizon should be long term to efficiently cope with volatility. While every market will have its ups and downs, remaining focused on the long-term goals and following a disciplined approach help protect investors against substantial losses.
Financial Plan: It is important to begin with the formulation of a financial plan designed to specify and help you meet your financial goals. All financial decisions should be made according to the particular goals and plan. This plan may include details of the various investment options, tax savings and insurance cover.
Risk Tolerance: Based on their financial health and attitude towards risk, investors may be aggressive, moderate or conservative. Aggressive risk takers aim at higher returns, while conservative risk takers protect themselves from price volatility by accepting lower returns. It is important to assess your risk tolerance before you make a decision to invest.
Diversification: As the saying goes, “Do not put all your eggs into one basket.” Spreading investments across various instruments, sectors and segments of the market reduces an investor’s risk exposure. The extent of diversification would depend on the risk tolerance of an investor. A well-diversified portfolio is better for investors seeking steady returns over the longer term.
Simple Portfolio: While diversification is advisable, one should limit the portfolio to the number of instruments one can handle.
Focus on the Long Term: The investment horizon should be long term to efficiently cope with volatility. While every market will have its ups and downs, remaining focused on the long-term goals and following a disciplined approach help protect investors against substantial losses.
