Investment is most definitely the right decision to make in terms of maximizing your returns. However, investment in the right place at the right time is crucial. Here is six investment mistakes that you are advised to avoid in order to maximise returns from your hard-earned savings:
Planning is everything, especially when it comes to investing your money. Proper planning will go a long way in yielding stronger returns in the long run. However, improper planning can jeopardise your entire investment strategy. Therefore, start your investment strategy by dividing it into long-term and short-term strategies. Analyse your risk appetite and base your investment plan on your propensity to take risks.
No realignment of existing portfolio
It is very crucial to keep a close watch on the market movements, especially those that can affect your portfolio. If there is a need to realign your existing portfolio based on your market study, do it before it is too late. If you have to get rid of non-performing stocks, go ahead, get it done, and replace them with new performing stocks. This may sound irksome, but will end up benefiting you in the long term. If you do not realign your existing portfolio, you will not be maximising your returns while risking your invested capital.
Not on the lookout for increasing your income avenues
It is very crucial for you to step out of your comfort zone and lookout for increasing your income avenues. You can do this by taking up a better paying job or by starting a parallel business. If you do this while you are young with higher risk appetite, it will pay you richer dividends. Higher income means more savings, which means more investment.
Influenced into buying life and health covers
We often tend to buy life and health covers based on what our friends and family say. They tend to influence us in the decision. It may end up working in some cases. However, when it comes to your hard-earned money, all decisions must be well calculated and researched. Thus, do not just go in for a policy based on word-of-mouth.
Investing without conducting preliminary research can lead to loss of capital in the long term. Do not invest in equity or any policy without doing proper homework on the stocks, policies, returns, company history, and other crucial financial ratios. Study the market trends before you plan to invest your hard-earned money.
Borrowing beyond your repaying limit
Everyone needs funds at different points of time in life. As long as you take care of your fund needs by borrowing within your repayment capacity under a well-planned financial strategy, you will be fine. If you cannot see income visibility to repay, it is better not to borrow and make subtle adjustments to your financial plans to save money.
Disclaimer: Investment in securities market are subject to market risks, read all the related documents carefully before investing.