Here's Why To Have A Financial Plan In Place Before You Start Investing

The stock market is booming, and the equity mutual fund investors are witnessing a steady rise in the NAV of their schemes. On the back of long- term potential of equities and a promising growth scenario for the Indian economy, the investors today seems to be all set to create considerable wealth over the years.

While the existing investors are doing pretty well with their investments in mutual funds, nothing stops the new set of investors to reap the long-term benefits in equities.

What may be a matter of concern is the high level of market and valuations that may deter investors to start their investing journey now. However, for long term investors corrections and dips are taken in their stride. The stock market after all is not a one-way street and stocks will keep going up and coming down. Over the longer time frame, equities eventually drift upwards.

Still, for a better risk management, you need to have a proper plan in place, a financial plan that encapsulates your investments as well. If you are an existing investor or a new investor looking to start investing in mutual funds, having a financial plan helps. Make financial planning the starting point to navigate through various life stages on the way to reach your goals no matter how uncertain the journey is.

When stock markets swirl, most investors get worried about their investments. Does all this market action require you to rejig your investments? For most of those who are into chasing their goals, markets and its movements are irrelevant. The fear of losing money comes to mind if there is no financial plan in place. For all others who have a financial plan in place, the uncertainty and volatility attached with stock market are immaterial and largely accounted for.