Hyderabad: Come Diwali, we clean our houses, buy a variety of clothes and crackers, and light up diyas (lamps) to drive away darkness from our lives. The same zeal should be adopted to clean our investment portfolio, throw away non-performing plans and make long-term investments to remove financial worries from our families.
Amid the busy festival celebration with with family and friends, one should not forget to give a little time to think about financial matters. We give utmost priority to personal and family safety during Diwali which is usually celebrated with double the joy compared to other festivals. The lighting of 'diyas' (lamps), crackers and fireworks require us to remain considerably alert. A similar alertness is needed along financial lines so as to insure our families from all future worries.
A financial safety net is required. Many attractive plans come knocking at your doors but we should choose very carefully. Otherwise, there is a chance of losing our hard earned money. Those investing in stock markets should tread even more cautiously. It is better to keep aloof from trading as far as possible as it often leads to our losing investments.
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The long-term investments alone give us financial stability. Any investment should be made only after gaining enough awareness on it. When children burst crackers, elders keep a close watch. Just like that, when forming financial strategies, expert advice is a must. Never forget to cover your entire family with life and health insurance for a required amount. If not covered, the first thing one must do this festival is to buy an insurance policy.
Ahead of every festival, we clean our houses and throw away all clutter and useless items. Just like this, we should take a fresh look at our overall investment portfolio. Find out which investment plans are meeting our financial goals and which are failing to do so. We should immediately get rid of non-performing investments without second thoughts.
Every festival, we plan much ahead for buying new clothes and fancy items. The same zeal should be displayed in making investments as well. The earlier we plan for savings and investments, the better results they will yield. We can enjoy benefits of compound interest thereby getting enough income to overcome impact of inflation.
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While buying fireworks and sweets for Diwali, we choose a wide variety of them. Similarly, there should be diversity in our investments. After estimating strengths and weaknesses of different plans, we must strike a balance in our investment portfolio to get assured returns. Even fireworks include some risky items and some others not. Like this, some investments may bring higher loss and they should be avoided consciously.
Danger lurks in the midst of fireworks for which we keep safety equipment ready. Likewise, we must have a contingency fund equal to six months EMIs and expenses to meet any eventuality in life. Employees get bonus during Dussehra and Diwali, which should be used to recharge our contingency fund or invest in tax-saving plans or in equity linked savings schemes (ELSS).
