Sometimes, superstitions come in the way of sound investments because we get caught up in rituals or superstitions instead of thinking and investing smartly. Investing superstitions can mess with our emotions and possibly influence to the point that any one of us can make a bad investment decision.
All these superstitions have one thing in common: they encourage market timing by claiming to know the best and worst times to invest. But accurately timing the market is nearly impossible, even for the most seasoned financial experts with access to the best economic forecasts and market analysis. You have to be right twice. It’s not just about getting out, but when to get back in.
There is no need to invest based on quirky superstitions or financial myths. In fact, financial success can be boiled down to one thing: devising a strategy and sticking to it for the long haul. Here’s what you can do to help jump-start your strategy without wearing your “lucky” shoes or dress:
- Define your goals. What does future look like to you? Do you see it as having more time to relax or as an opportunity to try new things? Will you relocate to new place? Do you plan to have family? Do you wish to have some investment? The sooner you have a clear picture of how you want to spend your days, the better.
- Devise a plan, if there is nothing already available. The investing decisions should be deliberate and stem from a plan specific to you and your personal situation. Plan or strategy should take a number of variables into account, including current financial status, risk tolerance and time horizon. Revisit this plan periodically, especially when personal situation changes – for example, you change jobs or experience some other issues.
- Save as much as you can for as long as you can. Nothing else is going to work unless you save. If you make Rs 5,00,000 a year, 1% equates to saving just Rs 416.67 extra per month. That’s less than probably you splurge when you go out for a money – but it could turn into an extra Rs 1,50,000 or more for your retirement in next 30 years
You only have one shot to get this right, and you owe it to yourself to NOT have your financial accomplishment depend on the equivalent of a lucky ring. For help getting started, contact your local advisor.
Birla Sun Life Mutual Fund has created a video that showcases how we sometimes get caught up in rituals or superstitions instead of thinking and investing smartly.
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