Nikita Sony
Investment Advisor,
1. Draw a personal financial roadmap
Before taking any investment decision, look at your entire financial situation, especially when you just have never made a financial plan before.
This starts with finding out your risk appetite, return expectation and liquidity required.
2.Evaluate your risk appetite
All type of investments involve some degree of risk. There is also a risk of losing capital in financial product such as Equity, Bond or MF. Unlike FD, these are not secured investment. But there is reward for taking risk i.e higher the risk, higher the return.
3.Diversify your investment portfolio in different asset class.
By investing in more than one asset category, you will reduce the risk of losing money and your portfolio's overall investment return will have smoother ride. If one asset class falls, you will be in position to counteract your losses in that asset category with better investment return in another category.
Also, asset allocation has major impact on you financial goal. If you don't include enough risk in your portfolio, your investment may not earn a large enough return to meet your goal.
4.Consider Dollar cost averaging
Through this strategy, you can protect yourself from the risk of investing all your money at wrong time by following a consistent pattern of adding new money to your investment. Over long period of time, you will buy more of an investment when its price is low and less of investment when it's price is high.
5. Consider Rebalancing your portfolio occasionally.
Rebalancing is bringing your portfolio back to your original asset allocation mix. By rebalancing, you will ensure that your portfolio doesn't overemphasis one or more asset categories and you will return your portfolio to a comfortable level of risk. Financial experts recommend that investors should rebalance their portfolio on a regular interval, such as every six month or twelve month.
Nikita Sony, Investment Advisor
