Invest Judiciously For A Better Financial Future

Planning your investments goes a long way in improving the chances of achieving different investment goals over varied time horizons. Thankfully, there is a plethora of investment options that can help you accumulate the corpus required for these goals. However, the level of investment success that you may achieve over time would depend upon which ones you choose and in what proportion. Another important factor would be how disciplined you remain with your investment process. To get this process right, you need to follow certain investing principles. Here are a few that can enhance the chances of achieving your investment goals within your defined time horizon. 

Be Disciplined in Investment Process
One of the key factors that ensure consistent investment success is to follow a disciplined investment process. First, you must avoid making random decisions at the start of your investment process as well as while exiting out of different asset classes. More often than not, this approach can make you miss out on opportunities in the market. Hence, you must create a roadmap before you begin investing.  

This would involve establishing your goals to be achieved over the short, medium and long-term horizon, assigning a time horizon and determining how much to invest to achieve each one of them. Remember, a goal-based investment process ensures that you follow budgeting, give risk management its due and follow an asset allocation model that helps in creating the right balance between risk and reward. 

Don’t Shift the Goalposts
Your time horizon plays a key role in determining your asset allocation, which in turn determines the attendant risks and probable returns over a defined time horizon. Hence, once a time horizon is assigned to a goal, you must remain committed to it irrespective of how the market behaves and continue your investment process without any interruption. This approach not only helps in reducing the impact of volatility on your portfolio but also hastens the recovery process by bringing your average cost down. 

Avoid Frequent Changes
While investment is an ongoing process, there is no straight path to investment success. Therefore, your investment strategy and chosen investment options must have flexibility so as to rebalance your portfolio in line with your changing circumstances as well as the economic and political environment. Moreover, you must be prepared to tackle bouts of volatility in the market and the resultant dip in the performance of equity investments in your portfolio. 

While monitoring the performance holds the key to long-term investment success, it’s important not to get tempted to make frequent changes just because you have the flexibility to do so. Also, you must refrain from discussing your portfolio with all and sundry as conflicting views on your portfolio composition can make you lose your focus and compel you to make investment decisions that may compromise your financial future. 

Be Open and Collaborative
Last but not the least, you must always be open to absorb knowledge and use it in your investment process. Today, a lot of information is available on various investment options and strategies to invest in through print as well as electronic media. If you find it overwhelming to analyse this information, don’t hesitate to take professional help for better understanding and guidance. Once you start working with a professional, listen to him or her carefully as that can go a long way in allowing you to understand the complexities of the investment world. Remember, the lack of participation in your investment process can make it difficult for you to adapt to the ever-changing investment environment.