'Invest and relax' stance won't work in stock markets? Find out why

Investors should adapt their investment plans to the changing times in order to strike a balance between risk and assured income plans. An 'invest and relax' attitude will not help any longer. A conscious investor should monitor, review returns every year and change investment plans in order to maintain a safe balance.

Hyderabad: Investors need to adapt their investment plans to suit the demands of changing times in order to strike a balance. Investments in fixed deposits and gold yield assured returns. They were the most sought after in the past. With changing times, people's preferences have also changed. However, the present generation is not showing enough interest in such assured income plans. They are rather looking for hasty and risky investments in the hope of getting quick returns.

The young generation is also forgetting to review their investments periodically and not making any effort to strike a balance. Such tendencies are not yielding the expected profits in the end. This scenario emerged at a time when new investors increased manifold in stock market after Covid-19. Pertinently, the number of 'Demat accounts' has increased multiple times in the last two years.

Compared to their parents, the financial goals of youth are totally different. The young generation is seeking quicker financial freedom. This is why they are gravitating towards high income yielding plans regardless of the quantum of risk involved in them. Nothing wrong to aim at withstanding inflation while making investments. At the same time, it would yield better results if one takes some safeguards.

Young investors have an inherent capacity to absorb high risk. Hence, their investments are mostly targetted at equity markets. But, considering the uncertainty in the stock market, one should take a look at other investment plans in addition to equities. If all our money is parked in equities, we would have to suffer huge losses in times of collapse of stock markets. So, right tips should be followed to strike a balance between risky and assured plans while making investments.

Decide your financial goals first and then make investments accordingly. Aim at diversified investments while investing in equities, debt, fixed income, gold and such plans. Continue investments with a consistent regularity with a long term strategy. Make sure some of these plans will provide easy liquidity for emergency situations. Monitor performance of investments and review income from them every year.

Once an investment yields expected income, withdraw a partial amount from it. Do it in order to strike a balance in your overall investment portfolio. By reviewing our investments regularly, we can easily find out whether we are going in the right path in achieving our financial goals. Better results can be reaped only when we adapt our investment plans to the demands of changing times. An 'invest and relax' attitude will not help in this regard.