Follow A Well-Structured Investment Approach - Hemant Rustagi Chief Executive Officer, Wiseinvest Pvt Ltd.

Despite the proven fact that investing money judiciously is the key to securing our financial future, not many of us make efforts to invest the right way. That's because investing is perceived to be a complex exercise. In reality, investing is a simple process but requires an investor to be disciplined and have patience and perseverance to succeed. Therefore, if you are looking to either initiate your investment process or put it back on track, make sure you follow the right approach. Here's what you need to do. [EasyDNNnews:PaidContentStart]

Start investing early to benefit from the power of compounding
It's quite common to see investors delaying the start of their investment process for different reasons. While some do so for the fear of not having enough money to start investing, there are others who don't feel the urgency, thinking that they have enough time to build the corpus required for different goals. 

The fact, however, is that one can begin investing with an amount as small as Rs. 500. Therefore, the attempt should be to begin investing and then gradually increase the amount. Similarly, it is never too early to start investing, especially for long-term goals. Remember, you would require large sums of money for goals such as children's education, marriage and retirement planning. While the thought of creating such a large corpus can be overwhelming for many, the magic of the power of compounding can make it possible for you to achieve these goals, if you start investing early and regularly. 

Moreover, an asset class like equity can yield the best results over the long-term. Therefore, the sooner you start investing, the better it would be. 

Create a roadmap for your investments
Make sure you have a clearly defined time horizon and have a good understanding of your risk-taking ability before you start investing. Therefore, it pays to follow a goal-based investment strategy as that would help you work out an appropriate asset allocation for your different goals. 

Remember, a roadmap simplifies your investment process and encourages you to keep your focus on your goals. Besides, it helps you choose the right investment options. Remember, the core of your portfolio should be investment options like mutual funds as they are not only diversified and tax-efficient, but also are well-regulated. Needless to say, past performance alone shouldn't be the main criteria for selecting a scheme. While analysing long-term performance is important to measure the performance of fund managers during different market phases, the suitability of the funds should be given the top billing. 

Monitoring of your portfolio has to be an integral part of your roadmap as it helps you keep your investments on track through your defined time horizon. The key is to do this exercise at an appropriate time interval rather than doing it haphazardly. Also, be prepared to take corrective measures if there are visible signs of drift in any aspect of your investment process. Usually, monitoring the portfolio on a half-yearly basis can be ideal. 

Ensure continuity in the investment process
Don't make the mistake of treating investment as a one-off activity. In reality, investment is an on-going process that requires you to follow a disciplined approach. This not only helps in putting aside a part of your income for future use but also allows you to benefit from 'averaging'. 

Investors often panic during a falling market and get tempted to discontinue the SIP without realising that investments made during these periods will get them more units. Therefore, you must carry on irrespective of market conditions and reap the benefits in the long run.

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