Revisit Investment Tips from Your First Ever Financial Guru

Fathers are our best anchors and guides who more often than not have a smart solution to all our problems. A father’s teaching, based on years of experience and fieldwork, is like a golden rule which always remains evergreen. But with the fast-paced world and the constant learning and re-learning we go through, we often forget the simple yet always effective advice and tips that our fathers have given us over the years. Although it might seem that as time changes so should the advice we choose to follow, there are certain tips that we should never forget.

Let’s look back at five invaluable tips given by our dads that, when thought of on a deeper level, can constitute our investment philosophy:

Focus on the Core - Through the years our fathers teach us a lot either directly or indirectly. Focusing on our core competencies and making something out of them is what our fathers themselves have practised as well as preached. In the context of investments, it's always right to focus on good quality investments that would generate high and fixed returns rather than diversifying your portfolio beyond 20-25 companies or in assets you don’t understand based on a tip you saw online or on the news. Trust your father’s word on this and focus on diversification of your investment portfolio across sectors and assets that you believe would give you returns in the longer run.

Never run from Homework - Remember when you were a kid and would whine about doing your homework to your mom and one look from your dad and you would get to work? Well, the lesson to do your homework has followed you well after you have started looking after yourself financially. It is really important for you to do your homework before you decide to invest in a particular share, mutual fund or even before you decide to purchase a particular insurance policy. You can either decide to research on your own or log onto sites like https://www.stockedge.com/ that provide you easy access to all you need to know before you make your investment decision.

Patience is a Virtue - When it comes to investing, patience is the key. You can’t invest in something today and expect it to grow exponentially by tomorrow and give you huge returns. Stories of huge unexpected gains within short spans of time are unrealistic and this might not happen with you. Be patient with good investments which might be underperforming momentarily.

Discipline is the Key - If it's one thing that our fathers have taught, it's the importance of discipline in life. Just as he would advise you to get up on time, eat well and work hard when you were a child, being disciplined about your investing habits is essential for deserved gains. Keeping a check on your investments in a disciplined fashion and altering your investment portfolio as your goals change is a part of this.

Don’t spread yourself thin - Our fathers have also taught us how to work within the means that we have. Be it cost-cutting or innovative ways to reuse old things, our fathers have always made the best use of the resources they have had. When it comes to investing, one might tend to become a little greedy and invest above and beyond their means in hopes of unexpected returns. However, it is better to not spread yourself thin and only invest up to the amount which our income and savings allow. Getting carried away in the market is quite easy but if you try to always remember what your first ever financial guru taught you, you might be able to save yourself from losses that are beyond your risk-taking appetite.

Besides these general tips that can be the guiding principles of our investment philosophy as a whole, some specific investment tips that your father himself might give you this Father’s Day are:

• Savings are a must. With the need to earn more returns from our money, we often invest whatever is left of our salary after meeting our expenses but it is important to save a certain percentage of your salary for any contingencies that may arise.
• Insure yourself in the hustle and bustle of our lives, we often forget the likelihood of unfortunate events which might leave our family stranded. “Investing” in a better future by buying an insurance policy can go a long way in securing your own and your family’s future financially. If you are still relatively young, say below 45, you should probably consider a term insurance plan with add-ons like health insurance. Expanding your cover as you age is always smart.
• Our dads have always said that having a plan B is really important. Similarly, putting in your resources at one place or sector is not advisable and diversifying your portfolio is important so that loss from investment in one sector can be set off against the gains from another.
• Retirement may not seem like something you should start saving for especially if you are in your late 20s but starting early when it comes to organising your finances can ensure a smooth transition from working to retirement. Take notes from your dad on how to plan for retirement or even sit with him and help him hatch out his own plan.

This Father’s Day rekindles the teachings of your first-ever financial advisor and makes sure you don’t forget to wish him on the 20th!

The author is Co-founder & CEO, ELEARNMARKETS

DISCLAIMER: Views expressed are the author's own, and Outlook Money does not necessarily subscribe to them. Outlook Money shall not be responsible for any damage caused to any person/organisation directly or indirectly.