Things to make a note of before investing!
How often have you heard your mother say: ‘Do not spend so much money buying unnecessary things’? But who decides what is unnecessary or necessary? I believe every woman has the right to live her life to the fullest. We should look for ways to maximize our earning potential and then look for ways to grow it. These financial tips will help you make informed financial decisions.
1. Long-term investment strategy
Many prominent investors like Warren Buffet and Peter Lynch follow a "buy and hold" strategy. It is advised that individuals should hold their investments regardless of market volatility. Short-term market fluctuations should not prevent you from investing regularly.
2. Understanding risk and return
We cannot rely on historical returns to predict how markets will perform over the long term. Before investing, we need to consider macroeconomic, geopolitical, social, and legal factors to understand their potential risks and returns. Selecting any preferred asset class for investing should be based on risk tolerance and risk appetite.
3. Do not time the market
A disciplined approach to investing will help you maximize your total returns. People who try to time the markets fail miserably. Do not wait for the market dips/lows. Market cycles are unpredictable, and you could miss a buying opportunity if you wait for the markets to bottom out.
4. Avoid Impulsive selling
We are all compelled to sell most of our investments when the markets are down and our portfolio is bleeding red. It is normal for people to panic when they hear random news. Please resist these selling impulses as markets generally recover after such events/news. For example, markets worldwide have fully recovered from the lows of COVID-19 and continue to rise. There is always a buying opportunity for long-term investors.
Women shouldn't shy away from discussing finance. This is the only way to break the walls and set a level playing field. Let's be unstoppable. We've all heard the saying, "Be the change you wish to see in the world." This is for all the ladies out there, come join FIKAA to empower women so they can learn, invest, connect and grow together.
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Written by Mitali Pania
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