7 Ways To Become A Smart Investor In 2023
Investing wisely is the key to constant wealth creation. A lot of elements are essential in the entire process of becoming a smart investor in 2023. Read on to know about 7 ways to become a smart investor.
Why Is Investing Important?
Investing is putting money to generate more money. It could be done for a lot of reasons such as retirement corpus, child’s education, buying a house, etc. The process of smart investing demands keen eyes and a patient mind. Whether you are planning to retire early, want to go on a world trip, or want to buy a house, following a few basic disciplines of investing is important to achieve your financial goals.
Top 7 Ways To Become A Smart Investor
1. Start Early
If you are familiar with the phenomenon of compounding, then you will understand very well the importance of starting your investment journey as early as possible.
Many millennials are starting to earn at the age as early as 20 or 21. After getting an independent source of income, they usually tend to spend overtly on their lifestyle. This is not bad per se, but it definitely hinders your chances of growing great wealth.
Starting investments early is good for one more reason. Because the earlier you start, the more mistakes you can afford to make.
2. Be Steady
Consistency is as important as starting. One of the easiest ways to do so is by investing in mutual funds through a SIP. This will help you to keep regularly investing without even your interference.
If you want to be an active investor, you must learn about investing by reading business newspapers and having a better understanding of financial jargon so that you make better investment decisions.
Also Read: 8 Best SIP Plans To Invest In 2021-22
3. Heard The ‘Eggs & Basket’ Proverb?
All forms of investment come with their own pros and cons. Higher the risk, greater the return, and lower the risk, lesser the returns. It is said that the stock market and gold prices behave inversely. Meaning, if the equity market falls, the gold prices would start rising. This is because, in a falling market scenario, people go towards safer alternatives like gold.
You may either learn portfolio balancing yourself by reading thoroughly or could consult a financial advisor to maintain a good balance of risk and rewards in your portfolio.
4. Getting influenced May Not Be Good
Your friend has invested in Company A’s share. Now you are also willing to invest your money in Company A. Sounds familiar?
Usually, people who follow the crowd, don’t put much thought into where to invest their money. Blind trust and/or FOMO (Fear Of Missing Out) may not always work for you. That’s why keeping greed and adrenaline in check is important. Most people who get affected by these emotions have lost more than they have gained. It is best to learn about a good investment opportunity yourself first before making a decision.
5. Too Aggressive Investing Could Be Dangerous
When one starts investing, they may get carried away due to the returns. Pumping more and more money without considering the cash requirement is not a smart way to invest.
And, this sort of mistake usually happens in highly volatile assets. For example, selling your own house to buy cryptocurrencies.
This behaviour is extremely dangerous as this could wipe out your wealth instead of growing it exponentially.
6. Set A Goal
Setting a goal helps you decide the next steps to take in order to generate wealth through investing. For example, if your goal is to buy a house, then depending on your current income and the locality you live in, it is easy to deduce how much money you need to fulfil your dream of owning a house.
7. Stay Calm And Rational
Investing is a game to be played with a stable mindset, especially when it comes to equity investing. Be ready to take some losses too, as the picture of investment is not 100% rosy and sweet. Stay rational ‘and’ determined.
Also Read: Top 5 Mistakes To Avoid While Investing In Equity Linked Saving Scheme (ELSS)
Final Word
Investing smartly can help you grow your wealth and improve your financial stability. Try the 7 points mentioned above to invest better and smarter. If you are ready to invest in 2023, check out NAVI Mutual Fund for a hassle-free, cost-effective, and paperless investment process. You can invest in Navi Mutual Funds through aggregators like Zerodha, INDmoney, Paytm, and Groww, to name a few.
Disclaimer
This article is solely for educational purposes. Navi doesn't take any responsibility for the information or claims made in the blog.
