The biggest challenge many of us face about investments is finding enough surplus funds. Most of the time we are engrossed in balancing our income and expenses. Drawing up a personal budget allows you to take control of your spending and find enough money to save and invest for vacations, retirement and your children’s education.
The information age has not done away with the need to keep your paperwork handy. It has only felicitated mode of storage! Much of the paperwork is connected to your income tax returns filing. For you, that means you need to be more organized with paperwork and keep them handy in physical or electronic format.
April 1st marks the beginning of the new financial year. The ‘infamous’ day is also the one when we ought to set clear financial plans for the next one year. We can, of course, choose to celebrate April 1 as “All Fools Day” if we continue to commit the same mistakes that we did in previous years. Instead, we should convert it to a “Smart Investor’s Day” by learning from our financial mistakes. Given below are my confessions as well as resolutions for the new financial year as a retail investor.
Risk tolerance is the degree of uncertainty that you can handle in regard to a negative change in the value of your portfolio. While investing you may often have to do a risk-return tradeoff, the principle that potential return rises with an increase in risk. With so many different types of investments to choose from, how do you determine how much risk you can handle?