The Do’s and Don'ts before starting to Invest ?

The Do’s and Don’ts before starting an investing journey are the guidelines which one must follow. They minimize the risks associated with an investment and thus increase the probability of earning higher returns over a period of time.

The Do’s –

  1. Draw a personal financial roadmap. It involves dissecting your income, expenditure, savings and investments. Further determining the future financial goal.
  2. Determine the risk profile.
  3. Look for credible and reliable financial advisers to manage your portfolio.
  4. Always set aside a pool of emergency funds in case of emergencies and uncertainties.
  5. Self-learn the world of investment like understanding basic terminologies, asset classes, different modes of investments. This is to ensure that you don’t get fooled by false information and hoax practices.
  6. Follow financial news and government reforms in order to be aware of current market situations.

The Do’s –

  1. Never underestimate the risk associated with any investment type and always plan according to your financial profile and risk appetite. Don’t risk more than you can bare.
  2. Don’t fall under the trap of ‘Ponzi Schemes’.
  3. Don’t get greedy and fall for unrealistic returns. Investment is a journey where wealth is created over time. It is not a quick money making machine.
  4. Don’t invest with high leverage.
  5. Don’t put all your eggs in one basket.
  6. Don’t invest and forget. One should always review the investments from time to time. This helps us in knowing whether we are on the right track or need to change our strategy or maybe sell in order to protect us from any foreseeable risk.

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