Taking investment decisions :
In our last post we had seen how we can plan a strategy to take investment decision and how we can get direction for our decision making in investments.
once the following things are clear then we have to classify these goals in time wise classes.
Majorly you can classify it in three classes like
1. Short term : less than 3 years.
2. Mid term : between 3 years to 5 years.
3. Long term : more than 5 years.
Make a point that the asset classes are different for different time horizon.
majorly there are 4 different asset class in investments viz.
Equity,
Debt.,
Real estate,
Gold.
These asset classes have their inherent time horizon for giving performance. their risk and return parameters also varies with time. so we have to marry right kind of asset class to right kind of time horizon goals.
To make it more simple as per my knowledge
Debt. is a good asset class for short term goals where the more importance is on protecting the existing asset with little bit returns.
Equity and real estate is an asset class for long term goals where you can take some risk to get a little bit higher returns.
Gold is an asset class which will provide stability to your portfolio, it is well known asset class to get inflation adjusted returns.
some people are seen putting their money in equity for short term which is a wrong thing as per as the investor strategy is concerned then in such a case you are not an investor but a speculator.
Some put their money for long term in Debt. instrument which is also wrong because in such a decision you are missing an opportunity.
Real estate is a favorate asset class of Indians they just love it and refuse to believe that there are chances that the prices can reverse. this is a asset class which gives you a true sense of ownership.
you have to make a mixture of different asset classes as per the goals you have which will help you to build diversification in your portfolio.
We will see it in more details.......................
once the following things are clear then we have to classify these goals in time wise classes.
Majorly you can classify it in three classes like
1. Short term : less than 3 years.
2. Mid term : between 3 years to 5 years.
3. Long term : more than 5 years.
Make a point that the asset classes are different for different time horizon.
majorly there are 4 different asset class in investments viz.
Equity,
Debt.,
Real estate,
Gold.
These asset classes have their inherent time horizon for giving performance. their risk and return parameters also varies with time. so we have to marry right kind of asset class to right kind of time horizon goals.
To make it more simple as per my knowledge
Debt. is a good asset class for short term goals where the more importance is on protecting the existing asset with little bit returns.
Equity and real estate is an asset class for long term goals where you can take some risk to get a little bit higher returns.
Gold is an asset class which will provide stability to your portfolio, it is well known asset class to get inflation adjusted returns.
some people are seen putting their money in equity for short term which is a wrong thing as per as the investor strategy is concerned then in such a case you are not an investor but a speculator.
Some put their money for long term in Debt. instrument which is also wrong because in such a decision you are missing an opportunity.
Real estate is a favorate asset class of Indians they just love it and refuse to believe that there are chances that the prices can reverse. this is a asset class which gives you a true sense of ownership.
you have to make a mixture of different asset classes as per the goals you have which will help you to build diversification in your portfolio.
We will see it in more details.......................
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