Before you start investing check your risk profile

Before you start investing, the key is to understand your risk profile. Prima facie, you do have a risk capacity but what you need to check is your risk appetite. Risk appetite is more about understanding your actions in times of adverse situation, i.e., how will you react if your investments meant for six years starts showing negative returns after only three months of investing?

So, you are eager, about embarking on an investment strategy. You have decided that you will save money henceforth and invest it smartly to make it grow. You have consulted with your friends and family, have a fair idea on what all options that you plan to take.

Do you know what your risk profile is? Do you know that you cannot blindly invest without knowing how much risk you can take? 

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Before investing be clear of your investment objective.

Investment objectives can be broadly classified into:

1.Generating an additional source of income

2. Financing future needs

a. Buying a home

b. Building a retirement corpus

c. Child's education and marriage

d. Legacy Planning

3. Increasing savings/ Inducing savings

4. Reducing tax liability

5. Protecting your savings from inflation

Factors that determined Risk appetite 

Loans and Liabilities: 

The first and foremost facet to be considered before you embark on investing is to take stock of your loans and liabilities. Loans are simple. You have a track of them, even if you do not realise it! Generally, the EMI payment is deducted from your bank account. Just make a note of them.

Age: 

Obviously, the younger you are, the higher risk you can take (it includes those who are young at heart as well!). By age, what we are trying to say is, that when the age is lower, the investments have a longer time to reap rewards.

Income: 

Your income and its steadiness is another major factor which contributes to your risk profile. Are you in a good job which pays you enough to cover all your essential needs with ease? In case a couple of investments take a longer time to reap returns, will your day-today living take a hit?

Current Scenario : 

Your age, financial dependents, assets and liabilities, sources of income, level of engagement (active or passive investor) and investible capital

Past Experience: 

Knowledge about investment products, inclination to learn, nature and composition of the last held portfolio and its performance

Future Outlook : Time horizon available to fulfill the investment objectives, liquidity requirements in the near future, importance of tax savings vis-a-vis return on investment

Personal Finance Lessons From The Olympics

‘Citius Altius Fortius’ meaning Faster, Higher, Stronger is the motto of Olympics. The ultimate sporting event for athletes to do their best, win medals for their country and gain sporting glory. There is a lot of hard work, tears, sweat and blood behind qualifying for the Olympics & only few like PV Sindhu & Sakshi Malik got a chance to stand on Podium.

We can learn a few lessons from the Olympian athletes to use in personal finance management :

1) Set goals:

The basis for any venture is goal setting. You need to define in concrete terms your goals for different time frames. For example, a sprinter in the 100 m race will set different goals for different time frames. Short-term goals could be related to strength training and endurance. Medium term goals could be setting a personal best and winning medals in national events. Long term goals would be getting selected for the Olympics team or running the 100 m under 9.90 in the next Olympics. Similarly, you should set short term goals, medium term goals and long term goals that can be measured. Short term goals can be related to budgeting. Medium Term goals can be related to building a home and long term goals could be comfortable retirement, children’s education etc.

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2) The earlier you start the better it is:

To compete in a sporting event on an international level requires years of practice and training.

For example the legendary swimmer Michael Phelps took to swimming at the age of 8 and held a world record in swimming at the age of 15 years and 9 months. Usain Bolt was already winning all the races in his school by the time he was 12. The earlier you start, the more practice you have and the more time you have to rectify mistakes. You have time to experience more and compete more. This is applicable in every sense to personal finance.


3) Understand & Work around Circumstances:

While playing a sport, it is not enough to just do your best. You need to understand changes in rules, opponents, new training strategies, playing conditions etc. Similarly, you need to understand that Financial Life is dynamic so Financial Plan can’t be static. So what you have planned today may help you to take next step but if required you may have to change path later.

4) Get professional help

Athletes have different people around them to manage their sport. They get professional help from their coach. They take help from sports doctors and therapists to keep their physical & mental condition at the peak. They take help from nutritionists and diet experts to ensure they get the required nutrients from their diet. If personal finance overwhelms you, you can take the help of professional advice. Professional advisors will be able to give you expert, relevant and unemotional financial advise.

5) It is not over till it is over:

You will face hardships, downturns in personal finance. But you cannot lose heart. You have to rise above the struggles and try till you succeed. Sprinter Gail Devers suffered from a disease called Graves disease that threatened to end her career. She fought back, recovered and won gold medals in the 1992 and 1996 Olympics. Justin Gatlin (age 34) who came second in 100 mt race – has similar story of ups & downs. Many people feel it is the end of the world when they face financial crises. You should remember that financial hardships may not be as bad as life threatening circumstances and work towards reaching your goals.

Why Endowment Insurance Plans Needed?

Endowment plans provide a disciplined way of saving cash for destiny economic desires. An introduced benefit is the lifestyles hazard cover which could be of outstanding assist to the own family if something untoward happens to the primary bread winner. The returns can be decrease, however they're frequently chance unfastened in case of guaranteed sum assured. Tax blessings, difficulty to sure situations, are also available on those returns.

This explains why endowment plans are desired by chance-averse traders as besides supplying cowl to an person's existence in case of an eventuality, in addition they give the maturity amount to the policyholder if he survives the policy.

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Guaranteed returns: These plans ensure that a stipulated amount is paid at the end of the term. If the policyholder lives until the maturity, he/she is given the assured amount. However, in case of the death of the insured, the amount is transferred to the nominee.

Things to remember: It is advisable to take the endowment plan for a minimum period of 15-20 years. The amount policy holder receives at the time of maturity is directly related to the number of years of accumulation.

Twin Benefit:

You get insurance + savings benefit. You get the money you invest with returns and also a periodic bonus at the maturity of the plan

Combination of insurance and investment:

An endowment policy is a combination of insurance and investment: The life of the individual taking the policy is insured for a certain amount. This life cover is referred to as the sum assured.

A certain part of the premium gets allocated towards this sum assured. Some portion of the premium is allocated towards the administrative expenses of the insurance company selling the policy. The remaining portion of the premium gets invested.

Additional Bonus

An endowment policy may declare a bonus every year The money that is invested generates a certain return every year. This return may be declared as a bonus. The bonus is typically generated as a certain proportion of sum assured or life cover as it is popularly known.

The bonus declared is not payable immediately:

Like is the case with a stock dividend or a mutual fund dividend which is payable immediately after it is declared, the bonus declared accumulates and is payable only when the policy matures or in case the policy holder dies.

Why proper financial planning is required?

The first thing we have to keep in mind that “We should be True To our self And Keep a Simple.”

Even though death and taxes are the only guarantees in life, a proper investment plan should drastically improve your odds of long-term success. However, it is unlikely that you will stick to your plan unless it fits your personality and you truly believe in it. Some investors consider the term “trader” a four-letter word. It’s just not in their DNA to actively trade their investment capital. On the other hand, some investors classify a position that they hold overnight as “long-term.” There are no right or wrong answers when it comes to one’s investment beliefs and investment plans will be as unique as the investors themselves. That said, your plan should only include strategies and time frames that you are comfortable executing. Be honest with yourself!

Financial planning helps you determine your short and long-term financial goals and create a balanced plan to meet those goals.

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The right investment should satisfy the following basic principles of investments: 

1. Safety 

2. Liquidity

 3. Risk level 

4. Transparency 

5. Return on investment

 

6. Exit route

Investment Planning also helps you to decide upon the right investment strategy. Besides your individual requirement, your investment strategy would also depend upon your age, personal circumstances and your risk appetite. These aspects are typically taken care of during investment planning. Investment Planning further helps you to strike a balance between risk and returns. By prudent planning, it is possible to arrive at an optimal mix of risk and returns, which suits your particular needs and requirements.

Apart from financial goals, the most important thing in financial-planning is investment plan. An investment plan is important because it creates a framework for every investment activity in which you will participate. It states what you will invest in, how you will invest, why you will invest, what percentage of your money you will invest, and so on. In short, your investment plan significantly affects your investment returns. Frame a investment plan well and then follow it carefully. Your investment plan is a detailed description of all the major components of your investment strategy. It will help you to do the following:Represent yourself. It explains your personal investment characteristics, such as your risk tolerance and your personal constraints, and how those relate to your asset allocation and targets.

Articulate what you will and will not do. This plan clearly states what you will and will not invest in and how you will invest, and also includes investment guidelines that will help you invest your money wisely and achieve your goals.

Provide an investment framework and guidelines for making wise investment choices. If you clearly think through and plan how you will invest now that you have few assets (and are not influenced by "fear and greed"), it will give you an investment framework and guidelines to help you reason through decisions which could have a major impact on future financial goals and retirement. If followed carefully, it will help you avoid poor investment decisions that could have major repercussions for your financial life, but only if you follow the plan.

You can place yourself in a great position, if you frame a good financial plan. It is normal and human to become isolated and depressed when we see our investments going down and there seems to be no answer. No matter, with all that is going on with the economy, there is always opportunity's in the #investment world. Even if the market is going up, down, or sideways, there is always money to be made.

What are the best options to invest money?

Whether you have just come into a large lump sum of money or have some money set aside to begin investing, there are a variety of ways to go about investing your money. It is important to do your research prior to investing. There are some mainstream ways to invest that can work for even a novice, but you should always weigh the risks with the probable gains.

As a new graduate, the first thing you should do is to lock down as much money as possible in savings. 

What you should instead do, live like a student a little longer. The first 2 years after graduation is when you should try to secure your financial future. Unless you manage your savings, it is hard to manage your investments.

If you are a single person just out of graduation, your goal should be to save half of your 12 lakhs in the bank. You should have enough bank savings to last 6 months of your monthly expenditure. Keep this in a fixed deposit. Once you are tight enough to manage this, proceed to the next step. ‘

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Start with balanced mutual funds that are fairly less risky. Get your toes in the water through these

Life insurance 

When an investor pays a life insurance company to payback money to them over a period of time in small increments, this is called an annuity. Depending on the specific company, the investor can choose to receive payments until he is deceased or can set up a stop date. Since the insurance company may go bankrupt, there is moderate risk involved, although many states cover up to $100,000 in the event of a company defaulting.

Banking

Bank accounts offer extremely low returns and are better used as a form of storing cash. Some of the types of accounts at banks include personal savings accounts, business savings accounts, personal checking accounts, business checking accounts and Certificates of Deposits (CDs).

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Business

Building your own business is an extremely risky investment. Although you could become financially free and your own boss, there is the huge risk of losing everything. When starting your own business, do your research, put together a business plan and seek advice from others with experience.'

Properties

Investing in real estate is another popular type of investment. Depending on your method of investing, real estate investing can become extremely lucrative if done in the proper locations and the correct way. You can purchase homes to fix them up and sell them for a higher price, or you can purchase homes to turn around and rent them to tenants for a slightly higher cost

In summary, the first rule of investing is to save. Unless you have sizable money to invest, your above-market returns would not matter. Once you have built your safety net, go after mutual funds and then to equity funds/stocks.

Know the Tips of Investing in Child Insurance Plans.

The rising cost of education is troubling Indian parents. More than 60% of the respondents in an online survey this as their biggest worry. This was followed by lack of knowledge, not saving enough and starting too late.

We hadn't included the biggest worry-the risk of their own untimely death-as a choice. We should have. According to the National Crime Records Bureau statistics, an Indian dies in an accident every 90 seconds.

It's a terrifying thought for a .. 

Child Insurance Solutions are insurance plans that take care of your Protection and Savings needs for securing the future of your children. As a parent, one of your most important goals would be to make sure that your children have a bright future and lead their lives comfortably. These solutions can help you achieve that by saving for your children’s higher education at a prestigious university.

Why Child Insurance is important?

1: The time and resources to grieve.

There is likely nothing more devastating than the loss of a child. In such an unfortunate and untimely event, day-to-day responsibilities might be overwhelming - the demands of your job, paying the bills, and having to care for other children in the household. The reality is you might not have enough paid sick or vacation time from work to take care of yourself, your spouse or your other children during this difficult time. If the unthinkable were to happen, would you have done enough financial planning to have the resources to go back to work on your terms?

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2: Cash Value and living benefits.

The cash value earned from a permanent* life policy (such as whole life, universal and variable life) can be withdrawn or borrowed against, providing living benefits that can used by your child as he or she gets older for many things such as:

• College tuition and expenses

• Financing a vehicle

• Paying for a wedding

• Collateral for loans

3: They'll always be insured.

There are a number of factors that can affect your child's future insurability. High blood pressure, diabetes, obesity and cancer are just a few of the many health complications that might prevent your child from being insured down the road. One of the primary benefits of purchasing a life insurance policy when they are young is that they will always be covered regardless of their future health as long as premiums are being paid.

4: Guaranteed insurability:

Some life insurance policies for children come with an optional guaranteed insurability rider/endorsement that may available for a nominal cost. As your child grows into an adult, this rider allows you to buy additional life insurance above the face value of the current policy (on specific dates and in certain increments) regardless of his/her health status at the time. Usually, the older the child gets, the fewer dates the policy owner has to purchase more life insurance and in some instances, after a certain age, the rider may not be exercised.

5: A locked-in rate.

Life insurance premiums for minors can be very affordable. Buying life insurance for your child now could give you an opportunity to lock in that rate for the life of the policy. As long as the required premium is paid, the policy will stay in force.

Policies vary greatly from company to company. A life insurance professional can help you select the right policy type and optional policy riders so your child will get the most out of their policy - even when he or she is grown with a family of their own.

How Money Management Make You Lead a Better Life.

Money is one of the important possessions to have to live and maintain a safe and secure life not only in present but also future life.

Money brings many benefits not only to the owner but also to others, though indirectly, when it is put into circulation. Money invested wisely into safe and risky avenues will always help in bringing more money.

The correlation between saving money and leading a better quality of life? Not just because you can buy more things, but because you get better at how you live. If it doesn’t add up.

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Money makes life better when it is put to use to fulfil one’s deep rooted desires as well to fulfil the desires of near and dear ones.

Money helps in living and leading a quality life with one’s own resources.

When you develop the habit of managing money, research proves that you change how you think. You get better at regulating impulses and distracting yourself from temptations. Once your willpower gets into the groove, your brain becomes better at focusing on a goal. And better focus increases your chances of achieving your goal

Regulating impulses and handling money well leads to reduction of unwanted luxuries from life. You eat healthier and perform constructive activities, making better use of your time. Thus, you lead a better lifestyle than most of your peers.

That is the overall function of money. To help lead a safe , secure and qualitative life throughout one’s time on this planet earth as well as to fulfill the desires and dreams of self and other persons who are close to oneself.

But using money for the betterment of deprived sections of society makes life better in true sense. Using money to help other deprived members of society to help them meet their basis needs of education and helping them get useful employment brings a deep sense of happiness which makes life better not only for the beneficiaries but also for the person using his/her money in this manner.

Money,when utilised for selfish reasons, can bring ephemeral happiness only for some time but putting money to good use for the overall benefit of society brings long lasting happiness which makes the life infinitely better.

So to lead a truly better life, one must use and invest money to first satisfy needs and desires of one’s family and after that one must put money to good use for the benefit of other “not so lucky “sections of the universe. Seeing a smile on other faces gives immense satisfaction.

So put money to productive use

The Biggest Money Mistake we make.

Imagine for a fact that you completed your graduation and went on to apply for the job. By god’s grace you landed a good job in a good company. Furthermore, you started working well and began to earn good salary. You are real excited hitting each and every road of the town and doing shopping for your family. 

We will be excited, because of the salary credit taking place and will try to spend the amount. Now, here is the catch. We will not be having any idea about way to spend the amount.

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Some of the common mistakes usually people in India do are given below as follows:

Spending Money: 

This is the major reason leading to debacle in the business. Mistake done by us, is that we underestimate expenses that takes place. You do not keep sufficient cash reserves, in order to satisfy your daily needs. This is a major reason for worry. One needs to reassess the financial position in a quarterly manner to avoid spending money.

Huge Money On Housing: 

We Indians, value our house and hence end up spending lot of money on house related issues. Construction of the house, repair/renovation, purchasing valuable items/components of the house, is hitting your wallet. This leads to confusion and one cannot save money properly. 

Doing Huge Credit Card Debt: 

You get excited and apply for many credit cards, because salary is good. Later on you go crazy and have dinner, shopping trip, purchase antique pieces, amazing vacation and this piles up on your credit history. You will have a huge credit card debt and if not cleared on time, can lead to problems.

Purchasing Costly Items: 

The major mistake done by people in India is that we purchase costly items like air conditioners, idols, antique pieces with an average salary. It can be really disgusting, because at the end of month you struggle.

Example: Mr. Raghavendra is working in a top notch IT major as level one programmer. Since his aunty is arriving from Canada after 35 long years, he decided to renovate the house and purchase costly furniture, which was not required at that stage. His expense came up to staggering 5.5 lakhs. He suffered because his money management was pathetic.

No Retirement Savings:

You only thought of the present and ignored the future. This can be very disgusting at times. Ignoring your saving for future can be hazardous and during your old age can lead to mountain of problems.

So, the meaning is simple. The money you invest can earn you more money. The more you save the money, the less you struggle during later stages of your life.

Question you may feel Embarrassed to ask your insurance agent ?

Applying for life insurance means answering some pretty personal questions. For example: How much do you weigh? (We’re talking the actual number, not the aspirational estimate on your driver’s license.) Do you smoke? Whom do you want to get the life insurance money when you die? Wait — not your spouse?

Don’t let any of that stop you from getting a life insurance policy. Here are the answers to five questions you might be embarrassed to ask your insurance agent.

1. Am I too fat to buy life insurance? 

Probably not.

Even if you’re overweight according to your body mass index (BMI), a common measure of fat based on your weight and height, you can still qualify for good rates with a lot of companies 

The key is applying for coverage with the right companies for your situation, which an agent can help you do.

“Some companies have very strict height and weight guidelines, some are much more lenient, and some companies don't use them at all,” 

Even if your weight keeps you from getting the best rates, Andrew says to apply for coverage when you need it, rather than wait until you shed the extra pounds. You put your family at financial risk if you go without coverage, and you could develop a health problem in the meantime that could drive up your rates if you wait. Apply for coverage now, he says, and if you lose weight later, you can ask the insurer to adjust your rates accordingly.

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2.Am I too old for a policy? 

The cutoff age to buy term life insurance, which provides temporary coverage for a certain number of years, is age 70 or 75 with most companies, Andrew says. You can buy smaller whole life insurance policies to cover burial and other final expenses at almost any age.

Most people need life insurance when they’re raising a family. The good news is that a term life insurance quote is going to be low and affordable when you’re young and healthy. Life insurance quotes increase as you get older. 

3.DOES MY DEATH-BENEFIT ADJUST FOR INFLATION?

Before buying one, ask your agent if your policy automatically adjusts for inflation. Because, inflation increases at an approximately 10% every year and if the policy is not adjustable, it wears down with time, even if you do not miss a payment.

Whereas some policies automatically adjust to inflation or can be improved with additional riders. Remember that INR 30,00,000 may look huge today, but may not be the same 25 years down the road.

4.WHAT IF MY HEALTH CHANGES AS TIME PASSES?

You may have to go for a medical evaluation before buying a health insurance policy. But during the course of the policy, your health may change for better or worse. So, it becomes important to ask if there is a chance to improve on your rating if your health improves. Understand what happens if your health deteriorates or you become un-insurable.

5. Can I leave the money to someone other than my spouse? 

“You can dictate whoever you want as your beneficiary,” 

The policy owner — the one who pays for the coverage — has the sole right to designate the beneficiary, the person who receives the money when the insured person dies.

.

Practical method to consider While Buying a motor insurance?

Your motor insurance premium is determined by four factors- make, model, location and year of manufacturing

The Motor Vehicles Act, 1988, under section 146 mandates that every vehicle should be compulsorily insured for third party risk. The reason is because of the growing number of accidents that causes fatalities and disability among the victims.

The objective of such insurance policies is to help the victims and the legal representatives of the deceased victims to secure substantial compensation. The compensation can be obtained only if the motor vehicle that was involved in the accident is insured. If the vehicles are not insured, then recovery of the compensation is a distinct possibility. 

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For this reason, vehicle_insurance benefits both the accident victims as well as the vehicle owners as they are saved of paying any compensation out of their pocket.

Claim settlement ratio:

Would you like to get proper settlement ratio to recover any loss or damage? So, choose the insurance company with a high claim settlement ratio because there is a high probability that this company will settle your claims.

Network garage: ( Importance of Car Insurance)

If you take your two wheeler to a network garage for repairing, the insurer will pay all your expenses. What a customer should look for is the quality and number of network garages because a wider network gives not only multiple options but also ensures quick claim settlement.

Customer service and support: 

You expect your insurer to help you in the case of any unforeseen situation, like accident or theft. Therefore, you should compare and ask people around you for their experiences with a particular insurer before finalizing the policy. Also, there should be 24x7 customer support so that you can contact the insurance company whenever you need.

Coverage: 

Choose the right insurance policy that suits your requirements. A standard bike insurance consists of a third-party liability cover and an own damage cover. According to Indian law, it is mandatory to have a third-party liability cover. However, it is strongly advised to go for both the policies to get a comprehensive cover, including coverage for accidental damages and third-party losses.

Tenure: 

Though you can buy the policy for 1 year, you should go with long-term policies offering coverage for 2 or 3 years as these policies can save you from the hassles of renewing your policy every year. Also, you can get discounts on own damage premium rates and stay unaffected from the annual hike in premium rates, if any.

Price: 

The cost should not solely drive the decision of buying a policy. Usually, there are various factors like age of the vehicle, geographic location, driving skills, etc.; which decide the premium of a policy. Remember, two-wheeler insurance is a necessity, not a luxury and therefore, pick the one that suits your budget.

Exclusions: 

While it is imperative to know, what is included in the policy, it is equally important to know what is not. You don’t want your claim to get rejected just because it falls under the exclusion list.

My insurance story: Million dollar Trip

Insurance feels good. Yeah, I said it. It feels really good when you're on the floor, in a fetal position, crippled by pain. Last summer while I was going for a bike ride with my friends I met with an accident which has brought me to my knees in pain. Everything about this was the worst. Except for my insurance. I love motorcycling but naturally I hate going down. I've been fortunate, but have ridden with many less so. I have the worst in mind at least once a minute. Sharing stories is how I stay alert.

I have many near misses I could recount, but this one came after I thought I'd seen them all.

Back to the insurance in a moment. First some highlights of what the worst is like, for you lucky readers who've never experienced pain of broken leg and the ambiance emergency room

A day passed and so did with the broken leg. 

For me, life continued as usual - thanks no small part to having good health insurance (and knowing that I had good health insurance). However, for some unlucky folks in the Emergency Room with me, that wasn't the case. In between my waves of pain, 

Going to the Hospital Now a days is terrible. Not having the right insurance that day is even worse. At Moneymindz.com we want to make sure everyone has the right insurance to cover these unavoidable bad scenarios. Be on the lookout for new health insurance tools to make sure you're not surprised by any coverage gaps. We at Moneymindz.com will make it easy for you. Just give us a missed call on 022-62116588 to explore our Free financial Advisory Service. we are not a seller of any financial products. We only provide FREE financial advice so that you are not mis-guided while buying any kind of financial products. 

I overheard a number of conversations between the Hospital administrator and patients about their insurance. People already gripped by pain and fear had to explain they didn't have insurance.

For these unfortunate people, the pain was only beginning.

If I had been uninsured, something as innocuous as a broken leg would have cost me more than 1 lakh in that surgery of my leg. But even with insurance, you could find yourself in a tough spot. . And 78% of those who filed for bankruptcy had health insurance! But they had gaps in their coverage (like high deductibles or limits on benefits) or were too sick to work and lost their health insurance as well as their income (which you can protect against with disability insurance.)

What are the greatest lessons you’ve learnt from investing in the Indian stock market?

Mark Twain once divided the world into two kinds of people: those who have seen the famous Indian monument, the Taj Mahal, and those who haven't. The same could be said about investors. There are two kinds of investors: those who know about the investment opportunities in India and those who don't. India may look like a small dot to someone in the U.S., but upon closer inspection, you will find the same things you would expect from any promising market.

The return from Markets is higher than other financial instruments:

Apart from real estates, the stock market do provide great returns if invested cautiously. SEBI has always tried to protect the retail investors. So, it takes in profit making companies only for public offering. Taking this into factor, every company that is listed has a chance of good growth over the years.

People mistake volatility for risk :

Since stock prices fluctuate, people get emotional and start worrying when prices get low and start celebrating when they get high. They never think of it as a business that they own. If then own a house as an investment, they never track the price daily. But, just the availability of a quote on a stock everyday makes most investors incapable of handling the fluctuations. This generally results in getting in and getting out at the precisely wrong time.

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Diversify: 

Always diversify. If you see a sector booming, even then you need to diversify. There is always what if ? For eg: the issue to H1B visas hit the Indian IT stocks negatively. If a person was bullish on IT stocks and invested all the shares in IT stocks, he must have taken a hit. Similar case can be with tea stocks. The tea stocks will be in good position few quarters down the line but there is if. What if the monsoon is so bad. There is always some probability of things going bad. Diversification shall not only be with regards to stock but also with respect to industry/sector.

Understand your investment: 

If you are going to do it yourself, do not follow what others say. You would not like to blame on others if it impacts negatively on your portfolio. Many individuals/brokerages like to gloat about profits but they would show less number of losses. Always have a fundamental analysis by yourself. Otherwise, invest in other instruments with less risk and less return.

Be updated:

The fundamental factor which made you invest in company may change. This will lead you the average out. Hence, you need to be updated about the market news. Be posted about your investments at least on weekly basis.

Investing beats trading: If the various researches are to be believed, people make more profits on investments than on intraday trading. Although the prospect of making great profits lure the large crowd into intraday, it is really few people who makes profit on intraday for continuous basis. Have a read on How to invest like warren Buffet?

When analyzing investing successes : 

People think a good outcome means a good decision. However, this cannot be more untrue. Good decisions can have bad outcomes (a high probability event on which you bet not happening) and bad decisions can have good outcomes (low probability even on which you bet that it wont happen actually happens). Thus, one cannot deny the role of luck in the markets, especially in the short run. However, as your number of years increase in the market, the role of luck reduces as probability and actual experience should align.

Be fearful when others are greedy and greedy only when others are fearful : 

This can be related with demonetization. If you look at the charts of most of the stocks, they plunged drastically after demonetization. Most of the professional investors considered it as good signal to buy the shares at attractive prices. And they gained from it just few months down the line. This means when the share price is on bull run, invest cautiously. If a bad news comes which is not fundamental, it is time to buy more shares of that company.

Stock markets are cyclical in nature but since public memory is very short: People think that current trend will continue forever (trees will grow to the sky), which is the cause of disaster in most cases. At the peaks and troughs, this feeling (of trend continuance) is at the maximum level.