Investment planning lessons from Diwali

During Diwali season, investors anticipate fireworks on D-Street and often one hears the term pre-Diwali rally.

Nov 07, 2015 12:11 IST India Infoline News Service

During Diwali season, investors anticipate fireworks on D-Street and often one hears the term pre-Diwali rally. This time round, the rally is yet to begin as markets seem to be struggling for direction on account of subdued earnings season and fears of a rate hike by the Fed in December. The festive season offers some lessons on investing. Let’s take a look at some similarities between investing and Diwali.
  • Reduce Noise Pollution
Noise pollution is harmful to infants, old age people and those who have psychiatric and heart problems. The same theory applies for beginners in the stock market. Don’t go for stocks where loud noises are being made. Such stocks could see a short spurt and struggle for a long time as by the time you decide to lay your hands on them, they may be over-priced.
  • Keep backup plan ready for emergencies
Keep a bucket of water and a bucket of sand handy to put off fires.

To take care of unexpected emergencies, do not forget to add life insurance, personal accident cover, pension plans, child plans and healthcare plans as part of your financial planning. It works like a fire extinguisher in case your financial goals get unexpectedly hit.
  • Keep firecrackers away from children

Make sure that you store the firecrackers in a safe place away from your children’s reach.

Store your precious documents including mutual fund details, insurance policies, all papers related to investments in a safe and secure place. Also, inform your family where you have stored the documents related to these investments and once in a way discuss with them what these investments are. The world is moving digital and most receipts are available online and stored online. Ensure you have a backup of all your demat details and a printout of the necessary login details for each of your investments.

  • Dress properly for lighting crackers

While lighting crackers, avoid flowing clothes or silk material and wear appropriate footwear.

When it comes to investing or making a financial plan, you should carefully evaluate your goals and the risks associate with them. Mistakes or any type of negligence could cost you dearly.

This festival is not just about fireworks, sweets, gifts and shopping. It gives you effective financial planning lessons in disguise. This Diwali, understand the significance of Lakshmi in your life.

Wish you a happy Diwali and a prosperous new year!!!

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