9 steps for Your Investment Journey

Great piece of news.. with nearly 10 mn new investors making their stock market debut in 2020, the figure itself is 2x compared to the previous year. 

One of the key enabler is Technology (i) ease of opening a trading & demat account and, (ii) largely due to streamlining of the validation process. 

There are few another factors driving this phenomena, is a desire to create a passive / alternate source of income or, make a quick gain. 

Let's begin with a profound statement.. "Investing is simple, but not easy" more about the profoundness later in the article.

I am glad to present herewith, a quick note for all the market participants; the most important 9 steps for a glorious and rewarding investment journey. Request you to read/revisit for your own benefit - with the above in perspective..

1. Know Your WHY - Begin with an end in mind.

Get a fair idea by developing a simple plan for your short, medium and long term goals; set the milestones on your financial journey.

Assess your own net-worth by understanding the assets & liabilities of your own life goals. Be aware of the different asset classes (their risk & returns), valuations, tax implication and, your overall asset allocation. Know where would You be deploying Your hard earned money! Don't miss the impact of inflation, in all your calculations...

2. Know Yourself.. Once you are clear about your goals; the next step is your approach to investing - are You a Trader or an Investor - both have a different approach; the dynamics change very fast. Get your priorities correct.. are you an active trader or you choose to be a passive investor. Do you prefer direct equity over Mutual funds (as active trader) or, pick an Index ETF (as a passive investor). Every transaction has a cost and, a direct impact on your returns.

3. Know the Risks & Rewards for each of the above approach; assess how effectively have you dealt / mitigated the risks (first requirement before you start your investment journey).

Apt to know what Morgan Housel said in one of his tweet

"If investing were easy, everyone would be successful. And if everyone were successful, there would be no more opportunity to exploit. So it's never going to be easy, and a lot of people will always be unsuccessful."

Avoid these mistakes...

The E&I (Essential & Important); a simple kit of what would you require going ahead and possible alternatives..

4. Investing requires the right Skill set / Knowledge. If You don't have it, find a way to acquire the right training and get educated Or, find a trusted person who can help you on your journey to financial freedom. There are no free lunches - there is a price for everything. 

5. Investing requires Experience. The choice is Yours to gain it or, leverage on the experience of others.  

When You do it on your own - add Patience to the requirement list, a lot of it. 

6. Investing requires Focus. Focus, on Your own goals and desired outcomes - call it monitoring performance. 

7. Investing requires Courage to take action. 

8. Investing requires Conviction in your own ideas & decisions. 

9. Lastly, investing required the right Mindset. There is a strong reason for it; researcher on Behavioral Finance have received a Nobel, not the investor !

Hence, its said to be simple, not easy.. 

Once you have gone thru all the above you may realize what Naval has said in one of his tweet that its better to...

"Trade money for time, not time for money. You're going to run out of time first."

"Investing is simple, but not easy"

'Easy' means something that's achieved without effort. 'Simple' means something that's uncomplicated and easily understood. Simple can only be achieved with experience & effort.. 

Whether simple or easy; investing is not an 'option' to choose - its a necessity. The sooner we realize this, the better we are equipped... If one goes deep into the human psyche; one of the most important and underlying trait is survival, security; about having enough money in the future. Specially, in the age shortening career spans, dynamic nature of change in the business models and, the challenges in the job market. It's imperative to have financial freedom and, an adequate retirement corpus - to sustain Your lifestyle for another 40 yrs.

If you found the above useful and, if You believe you can benefit from the my experience, to help you in your journey to financial freedom. 

Let's talk, consider booking an appointment, avail a clarity call on how best can we work together - on how can we make the process both easy & simple...

Wishing you success in your investment journey...

Jayesh Matani, PMP

References for further reading: 

1. TIPS FOR AVOIDING THE TOP 20 COMMON INVESTMENT MISTAKES by Robert Stammers, CFA, Director, Investor Education

https://www.cfainstitute.org/-/media/documents/support/future-finance/avoiding-common-investor-mistakes.ashx

2. A Detailed post by Todd Lincoln, highly recommended to read it once before you begin. 23 Big Mistakes Investors Make (and How To Avoid Them). [Image credits too]

https://medium.com/better-marketing/the-23-biggest-mistakes-investors-make-and-how-to-avoid-them-4e8bf196d985

Disclaimer: Information herein this post/article is for education purpose only and reference for the context of the subject. All information is obtained from sources believed to be reliable. It should not be termed as advise or recommendation of any sort. Make an informed decision; if required, consult a professional before making any investments.