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DISCIPLINES REGARDING INVESTMENT

Investment-discipline means to have a strategy to meet goals, minimize risk and minimize costs. One should not be tempted to make emotional decisions. There are too many factors that must be taken into consideration when investing since the economy is not a steady entity, but a changing one follows boom and burst cycles. As a rule, these cycles are experienced when getting a long term portfolio. Therefore, it is important to be disciplined, when investing. To undergo a disciplined investment, one should – 1) Start investing early and often; 2) Not to let emotions dictate over behavior; 3) Respect the cyclical nature of market; 4) Portfolios must be balanced; 5) To be slow, steady and strategic.

It is actually the act of setting specific monetary (spending and saving) goals and measuring oneself against how well they are achieved. Once that financial discipline is established, a person can take further steps to become financially independent. It is done by the practice of maintaining control over one’s financial resources, making informed decisions about spending, saving and investments. It involves in creating a budget, living within one’s means and avoiding unnecessary expenses. It is also the ability to stick to a set of rules and a broad trading plan, irrespective of the circumstances.

A disciplined investment-approach will help to achieve long-term financial needs without depending on others. A young person can allocate more funds to high-risk options like equity and can stay invested for next 25 to 30 years. Then, he can slowly move to low risk options that can provide capital-protection. Thus, it is equally important to maintain discipline when times are good and when times are bad. By focusing on long-term fundamentals and taking emotions out of investment decision-making process, investors can better navigate through market volatility or unpredictable market conditions with confidence that their long-term financial plans are secured.