Spot the Hype

One thing I see common among investors is amount of knowledge they gain before they begin investing. They believe that they do the complete study and make perfect choices. They give most importance to TV channels and newspapers. They go along with rest of crowd, be it adding new shares to the portfolio, or be it investing lump sum amount. They keep chasing the investments, believing that they are doing the right job, especially those who are looking for short-term gains. They feel bad when they loose money and they are too quick to react when the market conditions are not favourable.

Their primary concern is to get started with what rest of world does, irrespective of their own objectives. They do not set their objectives clear before they begin investing. As an investor, you should be driven by your objectives, not by the market conditions. Understand your requirement, what you want to achieve with this investment, in how many years. Manage separate portfolio for each objective. You should tune your investments accordingly.

Recruit a good Financial Advisor
It may sound as if it is not a good advice. According to me more than 90% of investors do not have a professional financial advisor. They should save most of your investment, provided you pay them their due. In India, we call them Agents or Brokers. It works out on a commission basis. We think that it is not worth to pay him the commission. We do not understand the worthiness of a personal financial advisor, hence we see them cheap. If you can spot a smart consultant, with whom you can setup a different deal than the one of commission basis, I am sure it will be a fruitful experience for both parties. They may provide insights about the trend and suggest a investment plan specially customized to meet your objective.

Another important aspect about recruiting a consultant is Time. I believe most of investors do not spend quality time with any Financial expert, be it a self, before taking a decision. They are mostly driven by what they see, hear and what they read from media and Internet. You may do the best analysis, but it may not be sufficient.

Still not convinced? OK. Let me attempt to illustrate better. Let us assume you are a Software Programmer and you are also a good cricket player who play cricket during the week end. You can not play the game continuously for 8 hours. Whereas the professional cricket player may play the game continuously for 8 hours or even more. You may spend time in front of computer writing software program continuously for 8 hours. Whereas a guy from different profession may not. The professional financial advisors are meant to provide quality advice, because they are professionals. Let us make use of their intelligence and knowledge.

Be systematic and consistent

I am not talking about lump sump investment. For the amount of money you are going to invest, it is not going to be a big deal of loss or profit when we compare it with the market condition. If your objective is to reap the benefits after say 5 years, continue investing systematically. At no cost you should break the investment unless your objective is met. Do not get carried away with the hype that is created around you. You can enjoy reading the articles, such as this one and move on attaining your objective.