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MEDI SCENE
The Six Principles of Smart Investing

Dr. Vikram Lotwala
(Bariatric Surgeon)

What should I think about before investing?
Successful investing involves making choices that meet your unique needs today and your
financial goals for the future. Your personal circumstances will affect your decisions every step of
the way. Whether you are saving for a home, retirement, or your child's education, you want a
plan that will help your money grow. Here are six investing principles to follow:

1. Know yourself
We all have different investing goals and different time frames for achieving them. Some are
short-term, like saving for a vacation or a car, while others are long-term, like retirement. In
addition, every investor has a different comfort level with investment risk. While risk sounds like
something to avoid, there can be an upside - greater risk may offer the opportunity for greater
rewards over the long term. Finding a balance between risk and reward that you're comfortable
with - and that's appropriate for your investment time frame - is an important first step to
successful investing.
To better understand yourself as an investor, consider your:
i. Risk tolerance,
ii. Investment knowledge,
iii. Investment objectives,

iv. gross annual income,
v. approximate net worth and
vi. investment time horizons.
2. Get an early start
Taking advantage of the effects of "compounding" is one of the best ways to make your money
work for you. Compounding is money multiplying itself by earning a return on the return.
Starting early makes it easier.
What is "asset allocation"?
The mix of investments within your portfolio is also known as your portfolio's asset allocation. A
diversified portfolio typically holds a combination of various like saving accounts, PPF, Bonds,
Stocks, Debentures, Mutual funds and especially for Indians …. Gold jewelry and immovable
Property like land
3. Invest regularly
It's generally much easier to come up with a smaller amount to invest on a monthly or weekly
basis than to make a large, lump-sum contribution. A regular investment plan allows you to

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Vol. : 18 - Issue : 1ol. : 18 - Issue : 1 19 November-2019ember-2019