Investment planning is all about identifying and achieving different financial goals ( be it planning to buy a car, buy a house, planning for kids education, kids marriage expenses etc) with available financial resources

Investment world offers three basic investment products

1.       Bonds/ Debt : Bank FD, Debt Mutual fund, Corporate Bonds, Government Securities Etc.

2.       Equities : Stocks, Equity Mutual fund.

3.       Alternative Assets: Gold, Real estate, Vintage cars, venture capital, Private equity Etc.

Each of these asset class exhibit different return/risk profile and has different characteristic when it comes to taxation, liquidity, Investment flexibility.

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Mr Happy office is 45 Km away from his home and has an important business meeting next day morning at 9 AM.

Objective: is to be on time for the meeting (“your financial goal”).

Mode of travel: Mr happy can decide to commute through Bicycle, Car or Rail (“ you can choose bond/equities/alternatives).

Travel time: Mr happy has to decide on mode then he will be able to know when he has to start to reach office on time. For Ex Happy decides to go on bicycle, he has to leave 4 hrs early ;while by car and rail might require him to leave 1 hr and 30 min early respectively.

Now think Mr. happy did not decide on the mode and got ready 45 min before the meeting; now he has left with only one option to travel by rail otherwise he will get late for the meeting & fails on his objective.

Same applies to investment asset class; every asset class has different risk/return profile. If you decide to choose a bicycle (debt/bond) make sure you start very early and stick to longer period; if you chose other asset classes you might be able to achieve your financial target, even if you start late and has less time to travel.

Vehicle breakdown/unexpected traffic: Happy might get delay due to breakdown/ traffic; but had he planned for uncertainty and started little bit early than the required time ,then he would be in a better position to manage uncertainty.

Every asset has different volatility profile; your investment plan should also consider impact of uncertainty.

Get in touch with us today so that you can achieve your investment goals.