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When to start investing? What are the steps in the investment process?
The earlier you begin investing, the more likely you are to gain the benefits of the power of compounding. Moreover, the best time to start investing is when you are starting out with your first job, with minimal debt obligations. It is also important for one to understand the flow of their money before they can begin investing it in assets. Following are the steps in the investment process–
- Assess your risk appetite- You should calculate your assets, liabilities, and most importantly your risk appetite to get a sense of our current financial situation.
- Evaluating investment objectives- You should create a detailed risk-return profile to understand the level of risk you are ready to undertake and the associated risk you can digest.
- Asset allocation- Diversification plays a key role in maximizing returns and minimizing risks as you should allocate funds to different asset classes as per our investment goals.
- Monitor portfolio performance- It is very important to keep monitoring your portfolio at regular intervals to ensure that it is taking you closer to achieving your financial goals.
