6 Evil Investment Habits to Slay This Dussehra
Financial
planning is a big responsibility that is often ignored by many people. There
are multiple investment avenues where one can invest their savings. If things
are not handled carefully it can lead to problems and loss of capital. Whether
it is about investing money or taking loans, we all have some or other bad
habits. As we are going to celebrate Dussehra to commemorate the victory of
evil over bad, let us try to cut down our bad habits.
Some
of the bad investment habits to slay this Dussehra are as follows;
· Investing Without Diversifying
Diversification
of the portfolio is essential to protect your money from different types of
risk. It means that you must not put all your eggs in just one basket. Not
diversifying investments is one of the common bad habits. Having a variety of
investments in a diversified portfolio helps in reducing risk and financial
downside due to volatility in a specific type of asset class.
· Excessive
Cash In Hand
It is
important to make the money work for you. Holding excessive cash in hand can
lead to opportunity loss. Thus, it is important to hold the right amount of liquidity
in hand. Excessive money in hand reduces the chances of making higher returns
on your savings. The returns that you will get by holding cash in a bank would
be much lower than what you may generate by investing in the different asset
classes. Therefore, you must take wise investment decisions by deploying
sufficient cash after setting aside enough money for an emergency.
· Investing
Using Loan
Investments
carry different types of risks with them and there is always a possibility that
you might not earn returns out of them. Therefore, when you invest in any asset
class make sure you are doing it with your own money. Never borrow money and invest
using it because you will have to pay interest on the loan and the situation
would be worse when you make negative or nil returns out of your investment.
· Investing
Without Knowledge
Most
people have a bad habit of investing without having sufficient knowledge. They
do not take the help of advisors and end up investing in places where they
should not. It is important to understand that it’s your hard earned money and
investment must be made after a thorough understanding of the investment
avenue. If you are not skilled enough, do not hesitate to take the help of a financial
advisor.
· Becoming
Victim of Market Noises
Most investors
get carried away by the market noises. They blindly believe and follow
everything that is being said or passed in the market. A novice trader in the
stock market is the best example of it. He purchases stocks based on rumors or
information that might not be true and end up making losses. Therefore, one
must try to not become the victim of market noise and use prudence before
taking any investment decision.
· Not
Informing Your Family Members About Investment
One of
the bad habits of investing is not informing family members about it. Your
spouse, child or parents must be aware of all the different investments you
have made. You must not forget that you invest money for securing your and your
family’s future so they must be aware of all your investment. So give up the
habit of keeping confidentiality about your investments and be open about your
finances with your family members.
The
above mentioned are 6 evil investment habits to slay this Dussehra. This Dussehra
one must try his best to stay away from financial blunders. Try to follow the
healthiest financial habits and stay ahead in the investing game. Understand
your financial requirements and make your investment choices accordingly to see
positive changes in your financial journey.