Initial wealth building strategies – 2.

Hi there,

That is an alternative approach for beginners to make safe investments. Now, it may not be possible for every one to keep analysing the stock market on a continued basis. . You might be working in an MNC or a professional lawyer who just can’t afford to keep looking at stock market scores.So, how do people like you take advantage of share markets?  How do you avoid making worst investment mistakes? All you need to do is bring in an element of discipline in investing by adopting a systematic investing approach.

SYSTEMATIC INVESTMENT

This involves investing in selected stocks through equal installments spread evenly over time. Such a style offers you some benefits.

  • First, it is light on your wallet. You can get started by setting aside a mere Rs 2000 or Rs 5000 every month and keeping your investments going. I am sure that such a small sum set aside will not affect your family budget. You can increase the amount whenever you want.
  • Second, it takes care of the principal problem related to timing of investments. It helps you stay in the market through its ups and downs, without making any conscious attempt to time your purchases.

That is because when you invest the same sum of rupees, say Rs 5,000 every month in the stock market through the years, you automatically buy more shares when the market is low, and less when the market is buoyant. This is exactly as it should be.

While you keep investing like this, you can also think of pumping in more money whenever there’s a market downturn. For example , you invest Rs 10,000 every month systematically.  In a particular month, the stock market has made a correction. You can think of utilizing those dips to buy a bit more than usual. May be an additional Rs 10,000. This is a more effective way of investing and building wealth in the initial years.

As the saying goes, “little drops of water make the mighty ocean”…such is the impact of investing systematically.

Have a nice day!

You may like these posts:

  1. Initial wealth building strategies- 1
  2. Thumb rules to build wealth

Leave a Comment