Some investors wait for the “Right Time To Invest” but actually when the markets corrects, they panic and redeem their existing investments too in a caution mode. It is the natural tendency of the investors.
Some investors earns money irrespective of the market conditions. Remaining investors claim that they are “Lucky” to earn so. But do you know “why 2% of the investors earning money while remaining 98% can’t”- It is because that 2% investors have control on their “Emotions”.
According to financial experts- Best Time To Start Investing is “Now” but in reality it is not applicable as every individuals financial status is unique. They should invest according to their economical status.
As per our view, Best Time To Start Investing For Various Groups are as follows–
- Young Earners– Generally Youngsters join in jobs in the age group of 22-25 years and at that time they are not committed to any financial obligations. They were financially free and can invest “Aggressively” in the markets. Even though that younster is a savvy investor, he should invest aggressively to beat inflation. That corpus would help him to meet financial goals in the future needs.
- SIP Investor– Financial Planners recomend to do sip’s(Systematic Investment Plan)as it inculcates savings discipline among investors. Being a youngster your mind wants a latest smartphone, gadgets etc. Though it is common to have latest gadgets in your hands, that gadgets will become out-dated once the trend(Technology)changes. Then you will like to purchase that item too which is nothing but wastage of money. Instead of wasting money on gadgets, set an “Automated Sip” which will be auto-debited from your bank a/c once your salary is credited.
- Lumpsum Investor-If you have received lumpsum amount as bonus, gratuity and through gifts don’t rush to invest that money as “Lumpsum” watch carefully the price movements, split your lumpsum amount in 3-4 parts and invests that money in 3-4 tranches . As no one would predict the stockmarket movements investing in 3-4 tranches would help you in averaging your cost and make your investment safer.
- Salaried and Middle-Aged Individuals– Once they realised that they are in “Middle-Age” and they have to fulfil his child’s dreams in the coming years, with no second thought they should start investing .
Don’t regret on starting investing late, rather the thought to invest now is the best time to fulfil your financial goals. In this world “Investing Early” would not be possible for everyone The thought to invest now, even though it is late would help in meeting his financial goals
If he is in a position to do proper asset allocation according to his risk appetite, he can do so or else consult a trusted financial advisor who would guide him. Do remember Investors goals should match with the financial advisor’s advise.
- Nearing Retirement– Once the individual realise that he should start investing allocate 50:50 contribution equally to equites(shares.mutual funds)and debt(safety investment options).
While some argue that they are already in 50’s and couldn’t take risk to invest in equities! The reason why we are suggesting 50% in equities when you are nearing retirement, by that time you would endup met your child’s education annd marriage expenses and now it is the time to plan for your retirement.
As no one would help you in meeting both-ends during your retirement, it is in your hands to plan your investments that would beat inflation. That 10-12 years of equity investments would create huge surplus where you can set systematic withdrawal plan(SWP)or systematic transfer plan(STP)to debt funds which are relatively safer.
- During Retirement– During your retirement your earning capacity being stagnant, you can’t take risks. But don’t lose hopes, if you have huge corpus invest minor portion in equities(Not Recommended To all, For Those Who Can Take Risks)This would help you beat inflation. But don’t be greedy to invest chunk of money in equities. If you don’t need that money for 5-7 years and has time to closely monitor stock prices, then only invest in equities. But be selective in picking stocks.
If you are a savvy investor and can’t take risk consider post office monthly income(POMIS),senior citizen saving scheme(SCSS)and PradhanMantri Vayo Vandana Yojana(PMVVY)offered by lic in collaboration with central government.
From the above we can conclude that-
- Young Earning Member can aggressively invest
- Youngsters can set “Auto-Debit” to protect their salary from unnecessary spendings
- Youngsters can do “Lumpsums” in 3-4 Tranches to safeguard their capital
- Middle-Aged people should do proper “Asset Allocation” and invest
- Investors who are nearing retirement age should split their investment contribution
- Retired Individuals should give preference to protect their capital where if he is risk-taker he can allocate notmore than 5-10 of their retirement kitty. If he is a risk-averse investor he should invest in debt products to protect their principle.