The Art Of Investment: Some Crisp Tips

Investing is an art of implementing scientific process with discipline. Thus, investing is an art as well as a science, but above all it is a process.

- Anil Chopra

Often saving is confused with investing and many uninformed and unaware individuals stop at savings and never take the next step of investing and keep wondering why their wealth has not grown in real terms.

If you park all your funds in saving instruments like Savings Bank Account, Bank Fixed Deposits, Post Office Schemes like Post Office Monthly Income Scheme, Kisan Vikas Patra, National Savings Certificates and Provident Funds like EPF, PPF and GPF, then you have only saved some amounts and you have not invested it and hence do not expect any growth in your wealth for fulfilling your future goals like education of children, their marriage or comfortable retirement, etc.

There is no investment devoid of risk. However, taking calculated risk with strong discipline of following some time-tested strategies can actually help you grow and create wealth over a long period in a sustained manner.

Let’s understand few golden principles of successful investing.

1. You have to allocate your savings to various asset classes like Debt, Equity, Gold and Real Estate etc. If you just confine to one of these then either you are taking too much risk or you are being overtly conservative.

2. Golden thumb rule of asset allocation is that 100 minus your age should be invested in Equity, 10% in Gold and balance in Debt instruments like EPF, PPF, Bonds, Debt Mutual Funds and Bank FD etc. For example, if your current age is 50 years, you should be investing 50% of your funds in Equity, 10% in Gold and balance 40% in Debt.