Podcast 26
Avoid 4 Behavioural Finance Traits while investing
When it comes to investments, people tend to fall into a behavioural pattern while making investment decisions. This podcast of Mutually Yours focuses on four behavioural finance traits investors should avoid. These include:
When you’re investing, you will come across a lot of updates, suggestions through media, financial planner or the general public, which affects the behavioural pattern.
Herd mentality affects investment decision as many investors fear taking a contrary view.
Behavioural bias is also one of the behavioural finance traits that one should avoid. Based on interpretations, our mind creates technical impressions. Hence, we end up reacting in a certain way.
It is best to avoid exposing yourself to constant market information and updates in order to eliminate knee-jerk reactions.
Let’s hear from the financial expert to know more about behavioural financial traits in this interesting podcast.
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Fear Of Investing
The story about a giant living in jungle ringing the bell to kill the people scares the whole village. But later it is found that it is the monkeys and not the giant who play with the bell. This pretty much resonates with the real-life investment fear. There are circumstances due to which people fear many giants when it comes to investing. This is because of the factors like risk, market volatility, unpredictability, loss of money, etc. that refrains potential investors from investing in mutual funds. This fear of investing which can be rectified with proper investment approach: Research, start small, manage risks, do not lose hope and keep trying until you reach your goal.
• Research for the right type of mutual fund scheme that aligns with your investment objectives, timeframe and risk preference. This is the first step to overcome the fear of investing.
• Mutual fund is an affordable investment. For starters, you can invest just Rs.500 to buy units through Systematic Investment Plan or SIP
• Evaluate how amount of risk can bear from investment. If an aggressive investor aiming to earn higher returns, you can opt for equity scheme, while conservative investors can invest in fixed income securities.
• Do not lose hope is a mutual scheme is not performing well. Diversify your assets to reduce risk from volatile securities. Keep investing for a longer period to ensure maximum returns from the scheme.
• Last but not least, keep trying to overcome the fear of investment until you realize your dreams or accomplish your goals.