Wednesday, May 9, 2012

The Ten Commandments of Investing


Immaterial of whether you are in your 20′s or in your 50′s and you are looking at an investment you should know some of the MOST important investment steps. our Blogger PV Subramanyam lists them out for you:



Invetment steps

Immaterial of whether you are in your 20′s or in your 50′s and you are looking at an investment you should know some of the MOST important investment steps, so here they are:


Investment steps


1. Learn, know and Understand YOURSELF:

This is not so simple. Just too many people I know will say ‘I have to make this investment for 30 years. In 3 years they may have asked me 30 times what they should do – The NAV has gone up, The NAV has gone down, I am changing jobs etc. If YOU do not know YOURSELF even the Gods cannot help you. You’re making it tough for your advisers.

Investment steps

2. Be ready to invest:

All your expensive loans should have been paid off. This means other than a housing mortgage make yourself debt free.

Investment steps

3. Learn the absolute basics:

Debt, equity, conflict of interest, mutual fund, hidden charges, term insurance, budget, what an adviser will tell you – but you should check out at subramoney.com. ‘Do not leave home without this’

Investment steps

4. Find an adviser:

Research about him. Trust, but verify. Once you trust, let go.

Investment steps

5. Resolve conflict of adviser versus fund house versus you:

He may be inexpensive. However, inexpensive need not mean cheap. For example if you promise to invest Rs. 2 million a year every year for 10 years, I can afford to advise you for free. Pharma companies treat doctors well, do not worry. Jokes apart, understand what and why you are paying (or not paying)

Investment steps

6. Create a Plan:

To start your life with a good financial base, you need to understand your assets and liabilities (net worth), set priorities for your goals, create a realistic spending plan, set up an emergency fund, and put the core pieces of your investment plan in place.

Investment steps

7. Invest in the best fund houses and schemes:

Popular may not be the best, but then size and longevity ensure a simple Darwin theory. If it has stayed so long and collected so much money, that fund cannot be to bad, right? Keep monitoring but you cannot go too wrong. If the FM starts lagging the index, shift to the index.

Investment steps

8. Make copious notes on what you are doing and why:

Investment steps

9. Stick to your plan:

Do not get carried away by the media. If you have too high an opinion about a TV expert (or a blogger for that matter ask a few of his friends, soon you will know he/she is not worth the adulation). If in doubt read this blog. I shred most people, except those who can send a truck to kill me.

Investment steps

10. Live well
(you cannot take it with you), but provide for all known events and insure for unknown / tragic events.









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