As is the norm every year, it is yet again that time of year when I must draw up my new year resolutions. I start my list with the compulsory emphasis on my health and eating right with the right dose of regular exercise thrown in. Though the lure of making money has always been on everyone’s list, never before has it become more fashionable to talk and discuss finance and investments than in recent years.
My New Year resolution list too has this mandatory entry. On the basis of my mixed experiences on my ‘Do It Yourself’ solutions to financial security, I am super excited to draw up my list of New Financial Resolutions for 2023.
1. Responsible Investing: In the last few years, we have all heard about people discussing the best investment scheme that helped someone become wealthy. We have heard about quick fix solutions that would help us create wealth. Armed with knowledge gained from my best friend: ‘The internet’, I took to investing in the newer and fancier investment products that I understood very little but was certainly enchanted. Crypto currency, P2P lending, Futures & Options and many more; all came highly recommended as the shortest way to create wealth. They sure did come recommended but they also came with their inherent risk. As I lost money, I gained experience and lessons were learnt. In 2023 I resolve to be more responsible towards my money while investing.
Also Read: Financial Planning: Six money lessons from year 2022
2. Not all that Glitters is Gold: As everyone around me made money in the stock markets after the economy opened post Covid era, it felt natural to pull out from my other investments even at the cost of throwing my carefully planned asset allocation for a toss and joining the bandwagon. What followed was a slew of purchases based on ‘hot tips’ and NFO’s and IPO’s. The euphoria soon dissipated as these ‘hot tips’ got cold feet and many of the so-called ‘golden IPO’s” failed to make a dent on their listings. In 2023, I resolve to be more careful while I select my investments and not go by hot tips.
3. Winners take it All: While the indices in India made new heights, my stocks had a mind of their own as they continued to behave stubbornly like a belligerent child and refused to budge north. Call me a loyalist or someone who believes in long term relationships but I certainly had great faith in them (after all they had been purchased on hot tips by my more successful investor friend). My money remained blocked in these while I missed on valuable opportunities to use it to its full potential. In 2023, I resolve to sell my loser investments whose intrinsic value is unlikely to ever recover!
4. Bad news should not necessarily translate into staying away from stock markets: TheRussia-Ukraine war followed by high global inflation pushed many world economies to the brink of recession. As is usual in such circumstances, pessimism ruled the roost. Even while the world took steps to circumvent, the general consensus all of last year has been that we are heading for massive corrections. The Indian markets, however, seemed immune as they factored in these blips and continued their journey upwards. I booked profits and worse still stayed out of markets preferring the staid Fixed Deposits and sticking to cash. I kept waiting on the sidelines for the right time while the markets continued to make newer highs. In 2023, I resolve to not time the market but rather invest in a disciplined and staggered manner.
Also Read: Public Provident Fund: Can you invest more than Rs 150,000 in your PPF account?
5. Future Perfect: “If you save after you spend you will be left with nothing to save at all.” So implied the Investment Guru; Mr. Warren Buffet. Post Covid, many of us took to random and luxurious purchases in the form of cars, laptops, eating out at fancy places and expensive vacations. This was a natural fall out of more than a year spent in captivity at home due to Covid restrictions. As spendings became more extravagant, our savings became thriftier. Each time I skipped a few investment months, my savings for the future got set back by a few years! In 2023, I resolve to be more in control of my spending and committed to save towards my future.
It is said that resolutions are made to be broken and possibly I will too! However, lessons learnt from mistakes serve as beacons for future prudence. Well begun is half done and I feel quite satisfied with my list of resolutions. As I put down my pen, I am confident that I have taken the first step towards smarter financial decisions! Have you?
A Conscious Investor
(By Anupama Bhargava, Certified Financial Planner)
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