Many times, you may have read the word Financial Planning and you may have many complicated definitions as well. Hope you have watched “3 IDIOTS” . When Aamir was asked the definition of machine, he said in simple language “Machine is anything that reduces human effort”. Similarly in simple language “Financial Planning is the process of meeting your life dreams/goals through ...
Waiting for market to correct before investing: Greed and fear psychology is at play for investors who wait for market to correct before investing. In my experience, investors who follow stock markets are more likely to exhibit this trait as opposed to investors who do not follow markets. Investors should understand that individual stocks and mutual funds are different investment instruments. A mutual fund comprises of a portfolio of stocks. So while an individual stock in a fund portfolio may be overvalued there will also be stocks which will be undervalued. Diversification of individual company risk, also known as unsystematic risk, is the fundamental concept of a mutual fund. The strategy to wait for market to correct can theoretically work if you believe that the market itself is overvalued. However, you should understand that it is extremely difficult, if not practically impossible, to correctly call a market bottom. Many investors who exited their mutual fund investment ...
Financial Planning – A Foundation for Your Future Save money = Lead a better life tomorrow We all want to be rich and well settled in our lives. We need money for such a lifestyle and that too coming in steadily. Financial planning is the best way to reach your financial goals and meet future requirements. So what is financial planning? It is the process of mapping out financial objectives, current & future expenses, assets & liabilities to create a rock solid base for your future financial cash-flows. There are financial advisors, financial planners or financial consultants that help you create an in-depth financial plan. A financial plan is a thought-out path taking into consideration various factors such as current and future financial cash-flows. WHY DO YOU NEED FINANCIAL PLANNING? Each of us has aspirations, buying a car or a house, a grand marriage, hassle free retirement, etc. Each of these life goals has a monetary impact attached to it along with the obvious e...
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