Basics of Investments

Well hi to all first .Let me introduce myself as a Advisor who has seen two bear faces of in my career.So my advice to people to start from basic.My experience is that if somebody has invested in shares,mutual funds,Life insurance,PPF etc. feels that financial planing is being through.But Lets take a pragmatic approach and analyse things from mathematical aspects.
1.Do we know that our investments should earn more than inflation.Once I was among the presentations with advisers(they did not know this).So investors first basic is this.Ya I totally buy your point that as of now inflation figures mentioned are not true figures.But again 6-8% would be modest inflation rate for doing our calculations.Here also to share with you present FD rates across banks for 1 year does not give more than 7% that again withholding tax of 30.9%.oops if we add up the return would be not more than 5.5% to 5.75%.
2.Thumb rule says that 100 minus your age should be equity exposure.I hope post my this blog few would certainly go back and check there investments.
3.Are we aware that in our portfolio there should be tactical as well as strategic portfolio.tactical the one which we may at times had to look on daily basis and strategic portfolio which you might look in 6 months.I hope the horizon would be clear to everybody as the name and frequency required to review your portfolio mentioned by me earlier.But for clarity purpose tactical is one where at times you shares on your broker tip.I don't think so in 90% cases investor know about the company into as these are momentary stocks.So please piece of advice this is your tactical portfolio.Never ever take more than 15% of savings into this basket.Any point of time they could be liquidated(In nutshell this part of portfolio should not take sleep of you)
4.Strategic portfolio anything which you wish to financially plan for your life.There is always planning which could be done from 1 month to whole of life(100 yrs.).I know you people will laugh on my this comments but yes the moment my first son came in this world ,I wondered about his best bringing up(quality nappies ,education and successful career.But yes this could be a liability if you do not plan and asset if you plan.
So friends plan judiciously and don't take emotions control your 15% tactical & 85% strategic planning