Planning before investing

Planning before investing is crucial to maximise the return from your stock investments.

Investment objectives:
Have a realistic expectation of your equity investments. Evaluate the investment horizon, the risk and the time you can devote to tracking and maintaining your investment portfolio. This will help you in identifying the right investment instruments within your portfolio.
Risk appetite:
The personal risk profile depends on many individual factors like age, financial background, earning capability and stability. Understanding this helps in choosing the right investment instruments.
Portfolio allocation:
You should plan to allocate a percentage of your total investment portfolio to equity-based instruments. You should evaluate your other investment requirements, balance the total investment kitty among various investment instruments like insurance, tax-saving instruments etc and maintain sufficient liquidity.