There is no rocket science involved if you want to learn about investments; at the same time, investing is not the easiest task you will ever undertake. However, there are multiple ways to learn more about investments. Most people with basic knowledge of market-linked instruments start with a simple saving by purchasing a life insurance policy such as ULIP insurance.
 

6 Important Rules for Investors
 

• Plan for the long-term
  
  With your investment, always start with a long-term plan, which can include some short-term goals if needed. This should be done to avoid any last-minute planning that can lead to hasty decisions. You can first plan how much money you want to invest each month and the investment tenure per your needs.
  
  After that, find the financial tools and investment options that will help you earn compound interest on your investment. Your detailed investment plan should start small but be able to sustain for the years to come.
  
  
• Avoid hasty decisions
  
  Creating a detailed plan is important for making any investment. For instance, if you opt for stock investment, learn which ones are suitable per your risk profile, how you can invest in them, and what your investment period is.
  
  Quite often, investors tend to make last-minute decisions on the stocks they want to buy; while this may be normal for seasoned investors, beginners may end up with the wrong choices. And that can lead to small losses at the beginning, which may cause investors to lose their confidence in investments.
  
  
• Keep away from trends and fads
  
  There is a range of investment options open for investors, but not all of them will be suitable for you. Every now and then, you may come across investment tips from various sources, but many of these turn out to be fleeting trends that may not suit your investment strategy at all.
  
  Such trends are very common in the financial markets, and if you want to play safe, try and avoid them unless you have a reliable source, such as a financial advisor who can guide you on the pros and cons of such investments.
  
  
• Research your options
  
  If there is one golden rule of investment that you must absolutely abide by at all times, it is to research and gain knowledge about the market and your investment options. While trivial investment trends and fads are also a strict no-no, make sure to at least understand what they mean so that you can identify your investments correctly.
  
  Be it a simple term insurance policy, a ULIP insurance or a mutual fund investment, research them in detail before you start investing so that you are able to build a stable portfolio.
  
  
• Review your investments
  
  It is not enough to just make an investment and let it be for the next 5-10 years of your investment tenure. Review your investments periodically, at least every 6 months, and make changes as and when necessary.
  
  If there are major market fluctuations, you may be required to stop some investments and start new ones. But if you do not carry out this periodic review, you will never know how your investment funds are performing and whether you need to stop or add certain investments.
  
  
• Opt for diversification
  
  Even if you are a newcomer in the investment market, there are some investment rules that apply to all – do not put all your eggs in one basket. Your investment portfolio should comprise a mix of assets in varying proportions, depending on your investment tenure and risk profile.
  
  Hence, when the market fluctuates, some investments will perform better than others. That way, your investments will always steadily grow over the long term, and you need not worry about extensive losses.
   

How to Invest Safely?
 

It is a well-known fact that most investments come with at least some risk and that an investment can be, at less-risk but not completely devoid of it. But depending on your investment strategy and risk profile, you should always seek ways to protect your investments to the best of your abilities.
 

As you can see from the above investment tips, planning your investments for the long term, creating a diversified and making timely changes to your portfolio can be some effective ways of securing your investments. However, it is always advisable to mentally prepare yourself for small losses that may occur from time to time. 
 

This is why most investors hedge their investments with less-risk options or those with guaranteed¹ returns. For instance, if you have a Unit-Linked Insurance Plan, you can also opt for a life insurance savings plan that will offer a regular or fixed income when the policy matures.
 

If you already have a portfolio of risky  investments that comprise stocks, equity mutual funds and the like, you can opt for an insurance policy. This could be a term policy or savings plan offering extensive life cover or assured returns to secure your family’s financial future.
 

Conclusion
 

There could be a number of investment decision rules, but not all of them are meant to suit you. The way you want to invest and the amount you intend to set aside for a certain tenure should be your preference and to the best of your knowledge. While the 6 important investment tips above are basic guidelines, you can always add others to this list per your understanding.

L&C/Advt/2022/Dec/3217