1338RIL has remained flat in last two months, should one buy its shares now or not?
Investors try different routes to achieve their financial goals. One of the most common ways is to search for the investment that gives them the highest returns. In this rush to get higher returns there is often the reverse result because things do not turn out as expected. Instead of running after the best investment […]
Investors try different routes to achieve their financial goals. One of the most common ways is to search for the investment that gives them the highest returns. In this rush to get higher returns there is often the reverse result because things do not turn out as expected.
Instead of running after the best investment option there is another way that increases the chances of success.
Regular investment
One of the first things to do is to set a goal that has to be achieved. This will involve a monetary amount and the time period over which this has to be achieved. This is the starting point of the whole investment process and then the next thing to do is to decide on the amount that they will be able to invest each month.
This is the base to success because there is nothing better than investing a regular sum of money each month into various assets or investment options. This process is the key that will determine whether at the end of the day your investments are able to earn good returns. Note that the returns will not be the best because it is impossible to predict what will get the highest returns but as long as the overall returns are good the job of the investor is complete.
The main reason why regular investing is important is that this will take care of all the good and the bad times. Every asset class has ups and downs and only those who stick through both these times are the ones who are likely to end up with a good performance record.
For example, when things are going well, the investor would want to invest more but the cost would be more. On the other hand, when times are bad, the investor will not have the heart to invest fearing more losses. This is where regular investments ensure that both the good and the bad times are evened out.
Action matters
Regular investing is also popularly called Systematic Investment Plan (SIP) in mutual funds and some other names are also given to it. But there is more to regular investing because the action of keeping the investment going is the key to the entire process. This means not stopping when the times are bad and continuing through times when there are personal financial setbacks also.
There is an added element to regular investment which is that the figure should actually increase with the passage of time. There is usually a rise in the income level of an individual as they rise in their careers plus the impact of inflation also needs to be considered. In such a situation the amount that is being invested should also be raised at regularly. Once this is done, the overall corpus will keep rising and with higher benefits.
So, at the end of the day every investor should ensure that they maintain the right amount of discipline and keep investing through both good and bad times.