Investment mantra: Warren Buffett, one of the richest people in the world, has said that if you want to become a good investor, then first of all you must save.
Compounding is the eighth wonder of the world, important mantra for investors
The great scientist Albert Einstein had said that ‘Compound interest i.e. compounding is the eighth wonder of the world. Those who understand it, they earn it, and those who don’t understand it, they pay.’ This is a fundamental concept for investors as well.
Whether you are borrowing or investing money, compound interest plays an important role in shaping your financial future.
If you fail to invest, your savings will be eaten up by inflation.
The only way to deal with inflation is to earn profits by investing money in profitable businesses. Failure to invest means that your purchasing power will reduce and your lifestyle will deteriorate.
Patience is the mantra to deal with ups and downs
A key aspect of investing is to deal with market fluctuations. Short term market fluctuations can be disturbing, but long term investment i.e. more than 5 years can make you happy. If the earnings of companies increase, your profits are also sure to increase.
Over the past decade (from 2013 to 2023), the Indian stock market has delivered an average return of 11-13%, slightly higher than the country’s growth rate of 10%.
Successful investors are those who maintain the investment sequence for a long period and do not panic when the market falls.
Your portfolio balanced by investing in different things
For the long term, one should invest in a fund which manages risk through the automatic route. Invest in multi-asset funds, which invest in equity, debt and gold.
This diversifies and balances the fund portfolio, potentially reducing risk.
Take as much risk as you can comfortably afford
Warren Buffett said that you should take only as much risk as you can comfortably afford. He told that if you sit on the river bank and put both your feet in the water and try to measure its depth, you may drown.
It is important that you hold the bank firmly with one hand and balance yourself on one foot and gauge the river with the other foot.
Out of an income of Rs 10 thousand, definitely save Rs 2 thousand.
Warren Buffett has said that if your income is Rs 10,000 then you must save Rs 2,000.
These 2 thousand rupees can be useful to you in emergency. Generally, money managers also say that you should maintain an emergency fund equal to 6 months of household expenses.
The youth of the new generation take loans for their every small and big need. Fulfill needs through credit card. However, excessive spending can sink them into debt.
12 mantras for investment in the new year
Do not invest without a wise investment strategy
It is difficult to predict what direction the market will take in the coming years. We have seen markets that reflect the fast-changing, world-shaking events of this era.
The markets are going to be unpredictable and full of surprises. We live in uncertain and volatile times and the markets reflect these things.
Don’t fall into get rich quick schemes
A disciplined, long-term strategy makes a lot of sense in this unpredictable environment. Many opportunities will emerge in the coming years and investors should utilize these opportunities judiciously with long-term objectives in mind.
Always remain a humble investor
Don’t measure your success by the success of others. Don’t be angry at the success of others when your own investments falter. Don’t refuse help or advice from others. Don’t assume you know what the best investment is.
Beware of fraudulent financial advisors
If you are investing money in the share market then you should choose the right financial expert. You will find many financial advisors who will talk about doubling or tripling your money, but trust only those who have credibility in the market.
Don’t press the panic button regarding your investment
Do not press the panic button in case of market fluctuations. Your investment decisions should be based on common sense and hard data.
If you have invested your money wisely then there is no need to worry.
Avoid investing too fast
For long-term investors, slow is always better than fast. Entering and exiting the market with a short-term objective is not good for your financial health. Regular and systematic investment is the best way to invest for the long term.
stop chasing performance
The ups and downs of the stock market motivate people to make the most lucrative investments. Don’t buy something just because it’s in high demand at the moment.
Investing after seeing the rise in any stock can prove to be dangerous in the long run.
Avoid emotional investment
An investor’s biggest enemy is not the stock market but his own emotions. Don’t let emotions dictate your investment decisions.
It is best to stay focused on your goals and be aware of the risks when investing.
Kick investment ignorance out the door
You should know your investments better than yourself. Don’t act first and ask questions later. Careful due diligence is necessary before taking all investment decisions. There is no benefit in living in ignorance.
Don’t be too optimistic, be practical
Avoid being too optimistic, too bullish or too confident when making your investment decisions. Your investment decisions should be logical and rational.
Don’t hold on to your investments for long after they lose value, with the belief that someday they will yield bigger returns.
Don’t sit on money kept in your savings account
Remember that your money sitting in a savings account will not create wealth. Take it out of your bank account and plant it somewhere where it can grow.
Diversify your investments. The sooner you start investing your savings, the better it will be for your financial health.
Admit your loss or mistake
What would you do if you took the wrong path? Of course, you will return. However, this may cost you time and money. But the same does not apply to most investors when they have chosen the wrong investment.
