Episode 10 - Achieving peace while investing

Money Konnect

We invest so that we can achieve our financial goals and get peace of mind. However, investing can often be a stressful exercise. There are just a few simple things you can follow to ensure that investing brings you peace of mind. In this Edelweiss Money Konnect podcast episode, Radhika Gupta, MD & CEO of Edelweiss AMC, has thrown some light on investment psychology and given some tips on investing.

Key takeaways

Protecting downside: The rule of thumb in life, in war, and also in investing is that you must not lose more than your risk appetite. The best way to achieve this is through asset allocation which allows you to limit your portfolio losses by spreading your investments across multiple assets.

Emotional control: There are times when we are all guided by emotions and make emotional mistakes while investing. However, it is important to remember that in investing Emotional Quotient (EQ) is more important than Intelligence Quotient (IQ). Always remember to exercise emotional constraint and try to invest more when the markets are down and less when the markets are up.

Automated investing: Due to the price fluctuations that markets constantly witness, it is difficult to time market entry and market exit. Automated investing ensures that you participate at all market levels, thereby removing the need to time the markets. You can automate your investments through vehicles like Systematic Investment Plans (SIPs), Systematic Transfer Plans (STPs), and Systematic Withdrawal Plans (SWPs).

Chase consistency: Market trends keep changing making it difficult for investors to generate consistent returns. Instead of chasing trends, you must adopt a consistent approach to investing. A good way of achieving this is through investing in a well-diversified benchmark index.

Expert advice: This is the most important factor contributing to achieving peace in investing. We are happy to consult experts in most other domains of our life whether it is a doctor for our health or a gym instructor for our fitness. Investing should not be any different. It is always good to seek expert financial advice from a qualified financial advisor.

You can watch and learn more of these interesting investment principles on the Money Konnect Podcasts available on the Edelweiss Mutual Fund website, Spotify, Google Podcasts and Apple Podcast. We hope you enjoyed this podcast and will tune in to listen to more such podcasts on investing nuggets.