Blog

PROPER PLANNING ON INVESTMENT

Investment-planning is the process of aligning one’s investments to the goals and risk profiles. By analyzing risk profile, one can understand the true potential on investment. Investment planning is all about one’s investing money to fulfill goals, dreams and aspirations for future. While at it, one should also ensure that goals must be S.M.A.R.T. (Specific, Measurable, Achievable, Relevant and Time-bound). Otherwise, one’s plans may be vague or goals will be difficult to achieve.

Before investing, one should look for Strengths, Weaknesses, Opportunities and Threats (SWOT) – i) In Investment-planning, one’s strength is the income-level, job profile and how early one can start investing, ii) One’s weaknesses can be the liabilities and the number of dependents in the family, iii) One can find opportunities in terms of reducing the expenses to minimum level. This SWOT analysis of one’s investment potential is the barometer for one’s risk appetite. Aligning one’s risk appetite with one’s investment planning is crucial as it measures the suitable level of risk for you. Considering growth prospects, and risks are essential when evaluating big or small investment planning avenues, as all investments are subject to market risks. Markets rarely follow a straight and steady growth pattern as they tend to be erratic, unpredictable and volatile in their movements in the short term. This is because of the emotions and outlook of the investors to drive the markets. Those, in turn, are operated by uncertainties like natural calamities, geopolitics, weather, population, demographics, economic outlook, exchange rates, wars as well as inflation. It is better to be prepared to deal with the risk of short to medium term loss that is caused due to market volatility.

Financial planning is the process to efficiently manage one’s money and achieving personal, economic and financial situation. Determining suitable courses of actions to achieve one’s financial objectives is all about when it comes to the case of financial planning. In this case, a proper financial planner or financial advisor must play a key role to build a financial planning by taking holistic approach through reviewing of one’s current financial situation, investments and short-term as well as long-term financial goals – this may even help with an estate planning when actual time arrives.