The trouble with rising markets is that confidence levels among investors rise disproportionately and the investment sentiment turns a bit too euphoric.
The trouble with rising markets is that confidence levels among investors rise disproportionately and the investment sentiment turns a bit too euphoric. Investors tend to become careless and often overlook some of the basic tenets of investing; in particular — a review of their investment portfolio.
Conducive market conditions have the ability to mask a poor investment decision or even make it seem like a good one. But the fact remains, that a wrong investment stays that way. Sure, investors could well clock attractive returns, but then that is a factor of the rising markets, not something that the investment should be credited for. Over a longer time frame, when the markets witness a cycle (upswing and downturn), a poor investment inevitably stands exposed.
Which brings us to the question — what constitutes a wrong investment? In the domain of investments, the concept of “one size fits all” doesn't work. What could be the right investment for one investor might be grossly inappropriate for another. Hence, broadly speaking, an investment that doesn’t match the investor’s risk profile and fails to contribute towards achieving the latter’s financial goals and objectives is a wrong one.
For example, for a retired individual who has a low risk appetite and depends on investments to provide for his regular needs, investing in a sector fund would be a wrong investment.
Fortunately for investors, rising markets offer the opportunity to exit the wrong investments, that too at a profit. Instead of becoming greedy and taking on higher risk by investing in ill-advised investment avenues, now is the time to conduct a thorough review of your portfolio and get rid of the “deadwood”. Don’t get carried away by rising markets, instead, use them to your advantage!
www.personalfn.com
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
)
){kind=small}
){kind=small}
)
)
)
)
)
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}