Tushar Vaniawala


Many young working executives fancy the idea of early retirement. Taking control of one’s own destiny is definitely first on list of priority. To achieve this, one needs to take control of his financials. Otherwise, these dreams could turn into the nightmares. India’s life expectancy has increased to 68.8 years from 60 years in last 25 years. Planning for years post-retirement becomes very critical. With more years to live, income must also increase to maintain the current lifestyle. Besides, living life with basic dignity also requires prudent financial management.

Financial cushion is also a must to meet human aspirations as well as social obligations. Be it First foreign trip, Destination wedding or Child’s education. A proper planning today will set you free to follow your own free will. To achieve these coveted dreams, you have to let your investment grow. Time would be an important element here. Hence, earlier you start, the better!

First step would be to start saving from today. Investment decision also depends on the current age of the investors. Risk appetite and income level are important elements to decide investment strategy. Based on these criteria, here are the best options that an investor can consider

1. Stock Market: Equity market is the best investment option from a long-term point of view. History suggests, in long term equity is the best asset class. Stock market has delivered best returns over any other asset class. This asset class is suitable for a young Investor with long working life ahead. This investor class usually possesses more risk taking ability.

2. Equity Mutual Funds: Equity Mutual Funds provide the comfort of expert advice to an investor. It also helps to navigate market volatility better. Investment in Equity Mutual Funds helps to meet various goals of life. Bigger the dream, bigger should be the investment and longer the time horizon. An investor can expect realistic return of 14-16% over time.

3. Hybrid Mutual Funds: These funds take care of an investor’s need of risk management. Hybrid funds invest in stocks as well as bonds. These asset classes provide benefit of safe returns of bonds and benefit of equity at the same time.

4. Debt mutual funds: Debt mutual funds invest in debt or fixed-income securities. Treasury Bills, G- Secs, NCDs, are the primary source of investment. Debt mutual funds are attractive for investors more in need of a fixed income. It generates modest but higher interest than fixed deposits.

5. Dividend Income Funds: Instead of buying individual stocks, investors can chose to buy Dividend Income Fund. It provides regular dividend income along with benefit of equity. The dividend could be a steady source of retirement income. Dividend income may vary according to the prevailing market conditions.

6. Fixed Deposits/NCDs/ Bonds: These are the fixed income options rather than investment options. It helps in generating cash flow to maintain daily requirements. Investor can chose to invest in a short term or long term instruments. The decision depends on one’s own financial suitability. Investment options start from 1 year maturity and it could vary from 3, 5 or 10 years as well.

7. StockBasket: A handful of stocks picked up through extensive research can be a useful tool. An investor can enjoy the benefits of equity investment minus rigors of the stock market. Investors can avoid market volatility and letting experts handle their money.

StockBasket offers handpicked stocks to meet various financial goals. Various baskets include stocks that offer unique long term investment opportunities. It makes time to time revision of its portfolio. It helps to generate wealth over the longer time duration, in tune with goals and risk appetite in mind.

Conclusion :

In a developing nation like India, life is often fast and stressful. Post retirement is the only time when one connects with inner-self. It is the only time to reap the benefits of hard work of an entire lifetime and let no one own those years except you.
Only then, the true value of your life’s work could be truly realized!

There is this stock you laid your eyes on since a long time, good! The Market seems poised to make the fresh entry, great! Sharp investors are often able to identify perfect investment opportunities. It is their emotional volatility that often diminishes their returns. Solid research should be the base of any investment decision but the decisions are often derived from an individual’s emotional response. 

Investment decisions need an understanding of the situation that the companies are facing. Investors need to predict the future outcome of an event. It is important to assess the future earnings or valuation that stock would derive. 

An investor tends to be biased towards a stock which has been an outperformer in the past. He might end up ignoring sell signal on technical charts or fundamental perimeters.

Fear and greed also influence the investor’s thought process. Greed forces him to buy a beaten down stock, in expectation of higher returns. He might ignore weak fundamentals in that process. Greed may also force him to hold onto a stock past its prime. Fear stops him from buying a quality stock in a volatile market. He fears further downslide. Same fear makes him selling a well-performing stock way before its time; out of the fear of correction.

Long term investors are also prone to similar mistakes. They remain stuck to stock in hope of recovery and ignore weak fundamentals. Emotions are again at play when investors make decisions based on their gut feelings. By trusting their gut feeling, they attempt to bottoms or tops in the market.

Why investing or trading based on emotions can ruin you?

Stock market has always been hostile to those entering with a mentality to make short term money. Market mechanism often rewards patient investors. Here, money moves from fragile to strong hands over a period of time.

 A beginner often sells under panic when volatility increases, resulting in wealth erosion. An informed investor uses this volatility as an opportunity. He buys quality stocks at lower valuations to maximize gains over the period of time 

Beginner Basket

A novice investor is often a victim of faith. He follows irrational tips provided by friends, colleagues or incompetent financial advisers. Failure to build on one’s own knowledge often leads the participants to lose their hard earned money

How to overcome emotions when investing?

As Ace investor Warren Buffet once said: “Never invest in a business you cannot understand.” (Read more on Warren Buffet here). A market participant should always back his decisions with proper research. Understanding of the business that he is investing in is a must. One should also maintain patience to earn healthy returns over a longer period of time

Learning in stock market is a never ending journey. Not everyone is able to devote enough time out due to their professional commitments. As a result, participants often take short cuts. Here, emotions often take over rationale. It may result in mistakes while making investment decisions. The prime reason is the inability of a market enthusiast to generate solid research on his own. Stock Market requires constant efforts to gain knowledge. Instead, human emotions often take over and mistakes are committed. A simple way to counter it would be to seek professional help while investing. 

To manage these constraints, StockBasket could be an ideal platform. Products on this platform are backed by thorough research. Various baskets are designed to fulfil different risk appetite. These baskets help to achieve long term goals of the investors.

So, instead of losing sleep over stock market volatility let the experts work for you. While you are busy fulfilling your commitments, let StockBasket take care of the rest. Give it some time to mature. Then see, buying that new car or building that dream house will never look like a distant dream.

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