Ever since I have started controlling my finances I have been actively studying various types of investments. I began working in March and now that 6 months are over I am taking a hard look at all my investments so far. I had a decent amount in my savings account which I took charge of when I began working. Being a non- finance student I had no idea about taxes, investment options, stocks, PPF,NSC the list goes on. To add to it I moved out of my house to learn how to control all my expenses.
Now that 6 months have gone by it feels like a lifetime. As my mentor told me the other day time is just the difference between 2 events. When your involved in tons of things you feel a lot of time has gone by.Reading,studying, surfing the net, discussing with a number of experienced people has been an eye opener for me.
Lessons learned -
- Money management is a dedicated job. Not necessarily full time but everybody should spend some time managing their money. As I look around me most of the people are working really hard to make money, but very few people are being smart enough to simultaneously allow their earned money to work for them. People complain about lack of time, lack of knowledge and all possible excuses to avoid managing their own money.I have learned this lesson pretty early in my career and I plan to spend a dedicated amount each week planning my investments.
- When I first invested my money I divided it into fixed deposits, stocks, some high risk instruments, PPF and ELSS. I have decided to change this decision. I think this allocation is highly customized for each individual and their goals. I am planning to consolidate most of my investments into stocks. I feel value investing practiced with discipline is indeed the best form of investment. I constantly evaluate my decisions on each investment. To justify any of my stock investments I feel if I can invest 'X' amount in this stock then I should be able to invest '1000X'amount also into the same stock or not invest at all. The first Rule which I like to follow in stock investing is to buy a stock in a company I would like to completely own.Besides I feel that I if I plan to be in the stock market I should at least aim to beat the Fixed Deposits 9-10% p.a. I also feel that only when you have big money at stake do you really learn and take sensible decisions.
So since I am deciding to break my Fixed Deposits and invest in stocks I felt it is a good idea to write about it so that I can remember my thought process at this time.
I would love to hear inputs from all the experienced investors, people who have been in the market much longer than me and have different views on the subject of investing.