Strategy Towards your Investment Goals

To achieve your financial goals you must adopt long term as well as short term strategy to reach to your dreams, Your long term strategy with periodic reviews will definitely provide you tool to strengthen your investment decisions

Classic Theories of well diversified portfolio of Stock(diversified), Debt, Gold and Real Estate.

Time do keep on changing. But one should reduce the risk which comes due to uncertain behavior. Thats where diversification comes in.

If one feels a particular investment is attractive one can always shift the weights. But I suggest no class should go to zero any time (Unless then when you are bankrupt)

The investor should stand fast with his long-term investing strategy, but be ready to adapt the investment tactics. The long-term strategy defines your general investing behavior, your investing goals, rules and investment criteria. You use it to pick up prospective companies, valuate businesses and projects and build your investment portfolio. The tactics defines the way how you do all that stuff providing current economic and market conditions. The market is like an ocean: stillness is followed by storm and so on. But it does not mean that the ship should deflect from its course: in this case it takes a risk of getting lost. And the captain shoud be wise enough to prevent it from deflecting, on the one hand, and save the ship from being sunk or crashed with the storm, on the other hand. What I want to say, the investor, as a captain of the ship, should not deflect from his investing course, but he should adopt the relevant tactical solution to withstand the storm and come out with the least losses. How he should do this and what tactical solution to adopt, it depends exactly on the investing strategy, current market environment and business conditions. Do not follow the market, but rule it.

Select A group dividend yield companies for investment and keep long term attachment. e.g. Shipping corporation is available today at around 126 and yet to pay its yearly declared dividend of 6.5 Rs per share. This would work out around 5.2% flat. If you invest the same in bank, you would get 6.5% interest minus TDS would give you an yield of around 5 - 5.5%. The yields are matching. So, you can invest in SCI instead of putting the same amount as FD. If share price goes up, you are a winner. If share price falls down, you are sure of getting a dividend equivalent to bank FD.....Note that the dividend is not taxable in the hands of investor and hence you are still safer..... If you search you will get still more options with tata elxsi, karnataka bank, andhra bank etc. on the same basis

I asked one of my fund managers what was the purpose of investment. With a confused look, she said to me: "to earn profits". I could not help smiling. After being associated with investments for years, I always happen to find ones who are so confused because they are not thinking in terms of investments.

While every investor wants to make money, this objective alone is not enough. Our investment needs are a function of so many different factors like liquidity needs, timing of investment and even tax considerations. It best to put this all on a piece of paper in a format called the investment policy statement. Here the investor puts in investment objectives in terms of risk and return, the needs, investment strategy and all. 

Unless there is a very good reason like global financial crisis or a change in one's circumstances like the death in the family, birth of a child or something, one should stick with the strategy for some good amount of time like a year, and then review and change style if needed.

We are emotional beings. It is only natural to follow the herd in a rally. It takes discipline to stop and ask ourselves if our actions help or hinder or investment objectives. if the answer is help, go for it. If the answer is hinder, we must not. So if there is a gold rush and my idea of investment is playing very safe then commodity investment is certainly not for me!