Investments Planning

About Investments Planning

ssk finsol

Investment has two components Investment planning and investment management. When we talk about investments, the first thing that comes in the mind is about returns. How much return will I get on my investment is the first question client ask but they are never sure about how much return they actually want from their investments. This is because the investment objective is unclear.

Investment planning therefore is very important before Investment management. Investment planning is the process of identifying financial goals and building a plan to achieve these goals with our available financial resources. The financial goals can be buying a House or buying a car or sending our child abroad for the higher education. You should know after how many years you want to achieve these goals. How much capital is required at that time to achieve these goals. Which existing financial assets can be used to achieve these goals, how much additional investment or saving we should do and in which option. An important consideration in investment planning is about inflation rate and rate of return on fresh investment and existing financial assets. Investment planning thus helps us take the right and timely investment decisions and make our financial life much better.

Investment management is about handling of financial assets and investments. Investment management is not just about maximising returns but also about minimising risk. There is a famous coat “your returns are the reward for the risk which you are taking while investing”. Risk and return go hand in hand and striking the right balance between the two is the success of investment management.

Diversifying your investments gives you better risk adjusted returns and is the key for consistent wealth creation. At the same time over diversification is also harmful in long term hence selecting the right options for your investments becomes critical.

There are several options available in the market with different level of returns and risk. Any option giving you returns less than inflation should be avoided. Investment management is all about identifying your average performing investments and converting them into high performing assets. Even one or two percent increase in returns over long term will make a huge difference to your wealth. Example Rs 1000000 invested for 15 years will become 4177000 with 10% returns, 5473000 with 12% returns and 7138000 with 14% returns. Successful investing is about choosing the right asset as per your risk profile.

We at SSK Finsol will help you choose the right investment option which will provide you best in class returns while avoiding significant risk and also help you to maintain discipline in your regular savings to achieve your long term financial aspirations.