4 Investment Tips Seasoned Investors Swear By

Investing your hard-earned money can be an incredibly satisfying lifelong endeavor. Therefore, whether you have years of experience under your belt or are just starting on your journey, tips from seasoned investors can position you well for long-term success.

Given beneath are four investment tips which hold true no matter where you are along your investment path. In the event that you have been on it for some time, it’s probably a smart idea to reacquaint yourself with these,and if you are a new investor, these investment planning tips can provide you guideposts as you begin.

Define Your Goals and Invest Accordingly

Imagine sitting in your car, starting it,and having no idea of where to go. Just like a destination is an ultimate objective when you go for a ride, similarly, financial goals must be your ultimate objective when you invest.

After all, financial goals are something that you strive for.Therefore, your investment planning should include a disciplined and methodical approach; that’s what seasoned investors swear by. Moreover, having an investing roadmap can help you look at the bigger picture. To begin with, ask yourself, what are you investing for? Retirement, house purchase, children’s education, or world tour?

Once you determine your goals and the time horizon to achieve them, you can choose the appropriate financial products to reach these goals.

Adopt a Long-Term Perspective

Investment objective may vary from individual to individual, however, everybody intends to get great returns. As rightly put by Warren Buffet, “Invest for a longer duration,” as such investments ensure far more benefits as compared to short-term investments.

Before investing the hard-earned money, one needs to comprehend the working of markets and the risks associated with an investment, which isn’t effectively possible with short-term investments.

Unlike short-term investments, long term investments offer the benefit of making substantial gains through compounding. Therefore, if you have goals like buying a house, saving for retirement or funding your child’s college education, long-term investment planning is the best possible option for you.

Diversification Is Crucial

John Templeton, who made billions through diversified funds, said, “Diversification is the cornerstone of any investment program.”As rightly said by him, diversification is indeed one of the most effective ways to build a successful portfolio. In a nutshell, it is the process of investing in different types of funds/assets and minimizing the overall risk by reducing the impact from a single asset loss.

While diversifying doesn’t simply mean eliminating the risk, it can help to manage risk.For example, if you invest in ULIP based wealth plans that give you the flexibility to choose from a wide range of funds, you can easily maintain a balance between equity and debt funds to suit your investment style.And to help you with this, insurers like Max Life Insurance also give you the flexibility to switch between funds as per the changing market conditions. This allows you to protect your investment from being eroded due to market volatility.

In addition, these income tax investments help you avail tax deductions too, courtesy,Sec 80C, and Sec 10 (10D).

Secure Your Investments Against Life’s Contingencies

As a breadwinner, savings for wealth creation for future needs of your loved ones and protecting them against financial contingencies might be your priority. But what will happen to your investments in case any untoward eventuality strikes?

A ULIP plan can help you address this issue. Such plans fulfill the dual need of investment and life cover. For instance, in case of your unfortunate demise during the policy period, your beneficiaries get the sum assured.And if you survive the policy period, you receive the lump sum maturity amount.

In the former case, your dependents can utilize a part of the death benefit to make the regular premium payments. This can help ensure that the goals that you planned for them are not jeopardized in your absence.

The bottom line is that with prudent investment planning,you can invest your resources to help grow your wealth and build a portfolio with high returns.Thus, keep these essential tips handy to help you invest with confidence.