To Be or Not To Be
A little kingdom I possess,
Where thoughts and feelings dwell;
And very hard the task I find
Of governing it well.
-- Louisa May Alcott.
...........hmmm....that more or less describes my situation !!
~A Wise Man Said~
It is the mark of an educated mind to be able to entertain a thought without accepting it.
~When in Lancaster~
Life as PhD Student
Encyclopedia of Philosophy
Sunday, February 04, 2007
I have entered the Market. Not the shopping market—that I had entered when I was two, and have been a major force in keeping it up and running ever since. I mean THE Market.
* I had never thought of ‘investing’ as seriously as I had thought about ‘saving’; I realized that all the hard work one does saving amounts to nothing if one does not invest the saved money well. You can make your money ‘work hard for you’, instead of letting it idle in the bank!
* I realized that having clearly defined objectives or goals for investment enables one to plan better. It seemed that investing ad hoc for the sake of investing, or worse still, investing for the sake of avoiding tax, leads one to make not-so-good decisions. Unfortunately, most of my investments were an offshoot of tax planning!
* Investing and Tax Saving should be viewed as two separate things. Tax saving should happen as a result of good investment planning and not vice versa.
* One keeps hearing that March is not a good time to start looking at your investments; I find it is true. The thing is, one naturally looks at tax saving modes of investment at this time in an unthought, unplanned manner. I myself was sold something last February with a ‘tax advantage’ tag, and only now I figure it was a dud investment!
* Insurance is not the best investment vehicle, though agents and advertisements fool us in thinking so. We almost forget the purpose of Insurance, we’re so drugged by what we see and hear. Buy insurance only to insure your family against what might happen to you in future. The best way to do this, I found, is to go for a Term Plan, which is a basic insurance policy that gives you highest possible life cover at lowest possible price. The other insurance schemes that also promise to invest your money, offer very inadequate covers at very expensive rates, because of the investment component. Not just that, they do not even generate as much returns as other investment choices. A lose-lose deal actually.
* I found that Equity is the best choice of investment for earning superior returns in the long term, albeit one appreciates the risk involved. One could either invest directly in equity in THE Market or indirectly through Mutual Funds (MFs).
* I was introduced to MFs in a big way; they allowed you to be a part of THE Market—invest into equity—and also diluted some of the risk. I learnt that there are many types and varieties and brands of MFs too, with differing degrees of risk, and one would do well to understand them before jumping onto the bandwagon. If going in for one, the Systematic Investment Plan (SIP) route appears to have a lot of favour, by which one can put aside a fixed sum of money every month towards the chosen MF, instead of paying a lump sum.
* Not all of us have the time or knowledge to pursue investment options in detail for our own good; however, instead of relying on agents who sell insurance or investment schemes for commission and other personal gain, it makes sense to go for an Investment Advisor who will charge a fixed fee, and in return will manage your portfolio. Any which case, it is good to be in a position to at least be able to assimilate what advice you’re getting—I realize that now the hard way!
I have only just opened a Demat account (don’t they say, better late than never?), and also made my very first investment based on my own research—I have opted for HDFC Equity Mutual Fund through SIP (check out this place for more information on good funds to go for). I hope to read more, learn more, exercise my decisions more…and not be a good bait for those insurance/investment agents anymore!