Market sentiments are influential in deciding the course of the market, but you should steer clear of emotions while investing in equities or even in SIP investments.
Investing is all about informed decisions based on your market knowledge and insights from analytics.
Market sentiments are influential in deciding the course of the market, but you should steer clear of emotions while investing in equities or even in SIP investments. You can keep your emotions at bay with the help of the following tips:
Set long-term investment goals
You need to establish a long-term financial goal. It means that you need to figure out the reason why you are investing as in your child’s education, retirement or to multiply your funds; review your age and investment perspective, sort out what you are expecting out of your life. Once you answer these questions honestly to yourself, setting a long-term investment goal becomes easier.
Find a balanced approach
Once you have determined your investment goals, you may become over-confident or under-confident about your financial perspective. In both cases, you stand to lose. The mantra here is to strike a balance between over-confidence and under-confidence. You should just be confident regarding your decision towards your investment or SIP plan.
Diversify your portfolio
With a portfolio diversification approach, you can ensure peace of mind. Here’s how. When you distribute your money across mutual funds and asset classes, it lowers your risk of losses. Markets act in different ways in different places at different times. So, it brings a balance in your investment; if some of your investments are facing the downside, others may see the sunny side.
Abandon the herd mentality
Following market sentiments without analysing them is a big mistake committed by many individual investors. It is human psychology to follow the herd and do what others are doing, especially when you can see them tasting success dur to the choices they made. But by the time you try the same and invest, maybe it is too late. The chance of making the same credible profit has already been missed.