1. Just as a menu card in a restaurant enables selecting what you "like", your investment approach should be to select what is "right" for you, as each product comes with its own nuances.
2. For instance, all debt instruments come with interest rate movements and all equity instruments come with market-related movements, and that's where your individual risk appetite comes in.
3. Therefore, what is right for you may not be right for someone else as it's never about the instrument but about a mismatch between it and your risk profile.
4. Biases like "over-optimism" or "conservatism" also creeps in which influence investment decisions leading to "under-reaction" or "over-reaction" to market realities at different points of time.
5. As macro-economic variables are extremely dynamic, an investor's financial plan should suit his risk profile assessed through questionnaires, and its chosen products should take care of short-term and long-term goals as well as future expenses.
6. For building portfolios, key principles require you to ensure:-
a) product suitability with risk profile,
b) portfolio quality is never compromised,
c) diversification, as even best research isn’t error-free, and
d) provision of appropriate time to deliver performance.
2. For instance, all debt instruments come with interest rate movements and all equity instruments come with market-related movements, and that's where your individual risk appetite comes in.
3. Therefore, what is right for you may not be right for someone else as it's never about the instrument but about a mismatch between it and your risk profile.
4. Biases like "over-optimism" or "conservatism" also creeps in which influence investment decisions leading to "under-reaction" or "over-reaction" to market realities at different points of time.
5. As macro-economic variables are extremely dynamic, an investor's financial plan should suit his risk profile assessed through questionnaires, and its chosen products should take care of short-term and long-term goals as well as future expenses.
6. For building portfolios, key principles require you to ensure:-
a) product suitability with risk profile,
b) portfolio quality is never compromised,
c) diversification, as even best research isn’t error-free, and
d) provision of appropriate time to deliver performance.