We are almost marching towards the end of first quarter of 2018. It is the right time to invest in the right investment vehicle and avoid risk-prone ones especially when the financial year is about to close.
Yes, indulging in the illogical decisions can get highlighted when the market is too quirky. In the same context, let’s provide you some investment options or tips to behaviour that you should avoid in 2018.
1. Stop chasing the toppers
A majority of us want to enhance allocation to ‘high performing’ funds in your portfolio. This is not at all a good idea! Why? You need to know that a specific allocation is made in these sections considering your time frame, goal and risk profile. Thus, by relying too much on the top performer, you are directly exposing your portfolio to higher risk. The other thing to ponder is – when a certain fund has already delivered higher ROI, its probability of delivering such ROI yet again diminishes. It is because the money should perform an accomplishment of fetching winner stocks yet again. If this is the case, why go on a wild chase and let your investments suffer?
2. Dumping an asset class
With debt performing poorly and equity delivery higher ROI, some of the investors may want to shift totally to equity. This is not good! Why? When any debt fails, it emerges as an undervalued asset class. Nevertheless, you wish to buy equity – the comparatively expensive asset class. As a result, you are on your way to doing exactly opposite of- selling high and buying low. You need to know that debt is meant to offer some fudge to your portfolio especially when you have unpredictable equity. Thus, you should go ahead and hold the money for the time they were suggested unless the fund itself becomes a poor performer.
3. Forgetting your time frame for an investment
If you don’t give your stipulated investment options the time it was kept for, you are not doing it any good and to your financial profile. Yes, suppose if you have opted for a long-term investment, you need to stay true to the investment period. The moment when you see trends suggesting instability in the, you want to exit and begin investing in a new vehicle afresh which is just bad and unfair! When you opt for an investment option, a time frame is also given for it to fetch dividends and to change or to exit it before maturity is a poor strategy.
The Bottom Line
Now that you are aware of the three vital investment options or mistakes that you must avoid in 2018, you should assess the mistakes that you have committed and resolve it. If you are looking for an investment option with higher stability, low-risk along with an assured ROI, you can always go ahead and invest in an online FD scheme!