Holi, the festival of colours is here. It is the time of the year to get together with friends and relatives and play with colours and exchange sweets. The festival of Holi symbolises the win of good over evil. In the same way, to have a good financial life, you need to defeat bad financial habits and embrace better ones.
Here are some investment lessons that we can learn from Holi.
Have a Diversified Portfolio
Can you imagine playing Holi with just one colour? That won’t be Holi. We all want to play with varied colours. These different colours add life to Holi. Just like Holi, your investment portfolio also needs a few colours as assets. Investing in different assets such as equities, debt, gold that respond differently to different market situations may help to optimise overall portfolio returns. Having a diversified investment portfolio that fits your age and investment goals can make your investments balanced and reduce risks.
Have Fun while being Safe
Have you ever had a bad Holi experience? Maybe the chemical colour irritated your skin, or you forgot to pre-treat your hair? Hence, it is important to first on focus on safety.
Similarly, capital safety should also be on your mind during investing. Taking higher risk than required can backfire. So, it is essential to focus on safety before taking risks with your investments. For an instance, it is always better to have an emergency fund with three to six months of expenses to handle any unfortunate events. Liquid fund could be one of the investment options to park emergency fund as it is a relatively low-risk mutual fund that invests in debt securities with maturity of up to 91 days. After the emergency requirements are sorted, you can invest in assets which are suited to your risk appetite to achieve your long-term financial goals.
Be Patient
Holi is also about sweets. Some desserts such as Gujiya and Thandai are almost exclusive to Holi. However, making these desserts isn’t easy, takes a lot of time and patience.
Similarly, patience is required to build wealth, as wealth creation requires time and patience. So, even if things may not look good for some time, the focus should be on goals. If you stay patient and invested, you can enjoy the sweet fruit of your investments.
Remove the Evil
Holi symbolises the victory of good over evil. Hence, it’s time to burn the evils in your investment portfolio. Investments which are not suitable for your profile shouldn’t be in your portfolio. Go through your holdings and check what needs to stay and what needs to go. You can also take professional help to streamline your investments. This exercise can help you focus on financial goals and achieve your goals faster.
Portfolio diversification, safety first, being patient and removing investments which may not be suitable for your portfolio are the four investment lessons that we all can learn from Holi.
Mutual Fund investments are subject to market risks, read all scheme related documents carefully.
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