RISK AWARE INVESTMENT GUIDE FOR EVERYONE

  FID is the final stage of selecting and overseeing a group of investments that meet your long-term financial objectives and risk tolerance . The first step is to formulate your investment goals and constraints. Your goals should be SMART: specific, measurable, achievable, realistic and time-bound. Investment constraints can be of different forms: liquidity needs (how quickly you might need to generate cash), time-bound (need return over a specific time period), tax concerns (capital gains, income tax), personal preferences (ESG rating, etc.) and unique needs arising from your personal situation (e.g. buying a property). The second step is to construct the portfolio by implementing the investment strategy and deciding how to allocate capital across geographies, asset classes (like equity, debt, real estate and gold) and securities (stocks, bonds). The main objective of portfolio construction is to meet investor needs by taking the minimum possible risk. The traditional   ...

  In economic terms, a high return means the investment’s gains compare favourably to its cost. Here are a few constructive suggestions that will give an insight about improving your returns : 1. Consider the key drivers of returns (MC, ROI, ROE, ROA, EBITDA, EBITDA Margin , Gross Profit , Gross Profit Margin , Net Profit , Net Profit Margin, Operating Margin , TSR, EPS, PER, PEG, DGR, DY, PBR, DCF, PFVR, etc. ) will help you to pin point your KPI’s that will give an insight about improving your financial health; 2. By buying investments at different times, you spread your risk - t his makes you less sensitive to price fluctuations in the longer term ; for example, with dollar cost averaging (DCA), you invest the same amount each month, regardless of how the markets perform ; t his means you buy more shares when prices are lower and fewer when prices are higher ; 3. Get serious about investing in different areas that would each react differently to the bull market (smart ...