The festival of Dussehra symbolizes the faith in defeating all forms of ‘asuras’ to protect humanity. The celebration of Dussehra marks a victory of good over evil. Hence Dussehra is also a time for self-introspection to identify your own ‘asuras’ and take actions to conquer them. The festival offers vital lessons of riding away from all the causes that hurdle your financial planning and wealth creation journey.
Here are a few ‘asuras’ you can conquer in the context of your investment or financial habits.
- Investing without a goal
“One man’s food is another man’s poison” can be an excellent way to explain that never invest in imitating your friends and relatives. Although Ravana may be a myth/legend and does not exist today, he does live on in the form of bad financial practices that can destroy our long-term financial wellness.
When you invest, you ought to have financial goals in your mind. It would help if you considered a prudent investment planning exercise recognizing your risk profile and investment objective, the goals you wish to achieve, and the time horizon dedicated to achieving those goals.
- Overlooking asset allocation
“Set it and forget it” belief doesn’t reflect what happens in life. Putting all eggs in one basket might not be a great idea. Hence, putting eggs in various baskets is an investment strategy that helps you craft a diversified portfolio of different asset classes like equity, gold, and fixed income. The objective of asset allocation as per your risk profile and investment horizon is to minimize risk while yielding the returns you expect.
- Not saving for a rainy day
The pandemic has made everyone acknowledge the importance of building a catastrophe corpus to deal with salary cuts, job losses, or medical emergencies. Safety and liquidity should be your fundamental concern while creating an emergency corpus and not returns. Conserving an emergency fund will help you tide through any harsh or unusual circumstances and avoid undergoing both financial and emotional trauma.
- Impulsive decisions
“The stock market is a device for transferring money from the impatient to the patient,” says Warren Buffet. Whether direct equity or mutual funds, or any other form of investment, impulsive and emotional decisions are destructive to one’s financial health; if done with discipline and patience, investments can recoup enormous wealth, but if done carelessly and impulsively, they can hurt all your savings.
- Not reviewing & rebalancing your investment portfolio
You have struggled hard to build your portfolio that all you want is to provide you good returns; however, your work does not just make a portfolio. You must be able to monitor and review your portfolio to get the best out of it. Owing to different market conditions, some assets in your portfolio might perform exceptionally well while others might just not. Hence it would help if you rebalanced your portfolio from time to time. Rebalancing is an act of adjusting the mix of assets in your portfolio so that the investments perform in line with your financial goals.
Conquering these money ‘asuras’ is significant if you want to secure your finances in the long term. One must learn to stay in line and work our negative habits so that the Ravana within us does not gain influence. This Dussehra, let’s face financial demons with all might and defeat them.
Wish you all Happy Dussehra and Happy Investing!
