As we enter the financial year 2025-2026, a lot has changed in recent times. Financial markets have been extremely volatile, interest rates are on a decline after a five-year hiatus, and US President Donald Trump’s tariffs have left the world markets jittery.
Amid this turmoil, many investors who have specific long-term investment goals are in a state of panic. Here, we list 15 key money lessons that investors can follow to meet their financial goals and stay ahead of the game.
“Investors should make sure that they do not blindly follow market trends. Before buying any product, they should check whether it is suitable for your investment strategy,” says Preeti Zende, a Sebi-registered investment advisor and founder of Apna Dhan Financial Services.
Key money lessons for long-term wealth creation
1. Stay invested: It is advisable to stay invested for a long time. For long-term wealth generation, one needs to remain invested for a long time. When a stock or fund has given negative returns, you should refrain from redeeming it. Instead, you should remain invested when its future outlook is positive.
2. Buy the dips: When the markets are volatile, it is recommended to invest more units of stocks and funds which are available at attractive valuations. “Barring the past six months, investors have not seen negative returns in the past five years. However, investors should buy more units when the market is down so that they can book profits when the market goes up,” says Sridharan S, founder of Wealth Ladder Direct.
3. Passive investing matters: When you are a novice, the best form of investing is passive investing. You can buy schemes that buy stocks in proportion to a benchmark index such as Nifty or Sensex.
4. Active for aggressive investors: Wealth advisors recommend that investing in active schemes is better than passive in the long run. “Active ones always outpace over 3 to 5 years,” says Sridharan of Wealth Ladder.
5. Insurance is not investment: Buying an insurance product does not equate to investing. So, an insurance policy should be bought only as insurance.
6. Keep learning about financial literacy: Self-learning plays an important role in your investment journey. It is highly recommended to keep learning.
7. Say no to fake news: Sridharan Sundaram of Wealth Ladder Direct cautions investors to verify the news before taking any action on it. “In one fake news, Nirmala Sitharman was seen recommending one particular investment, whereas in others, one could see Uday Kotak and Nithin Kamath of Zerodha recommending some products. Therefore, in the era of fake news, investors should be very careful of what they are watching on social media,” he says.
8. Beware of finfluencers: A number of finfluencers have emerged in the recent past, many of whom tend to misguide by creating hype. So, one should be careful about this trend. Recently, it was announced that finfluencers who are registered as mutual fund distributors will face scrutiny.
9. Active versus passive: One could maintain a healthy mix between active and passive schemes. Either of them should not weigh heavily in your portfolio. Each has its own strengths and weaknesses.
10. Review portfolio: After heavy volatility, investors are recommended to review their portfolios so that they can bring the ratio back to normal. For example, if someone intends to maintain a ratio of 80-20 between equity and debt, and on account of a bull run, the equity portion spiked to 90 per cent. It is incumbent upon the investor to sell some equities to invest the proceeds in debt so that the asset size returns to 80 per cent for equity and remaining for debt.
11. Gold shines too: As gold prices tend to spike in the long run, it is advisable to invest in the precious metal.
12. Debt gives safety net: Sometimes, being conservative helps. Therefore, it is important that you invest a portion of your portfolio in debt instruments.
13. Direct vs regular investing: When you invest in regular schemes, you forego your brokerage. In direct investing, your return is typically higher on account of lower TER (total expense ratio). And the difference could be anywhere between 1 per cent and 2 per cent. See this article for further details.
14. F&O for high risk takers: As a lay investor, you should be careful of investing in derivative instruments. Investment in futures and options is meant for the high risk takers. In Finance Act 2024, the government introduced a 100 per cent higher securities transactions tax (STT) by raising it from 0.01 per cent to 0.02 per cent.
15. Consult an advisor: Last but not least, it is always better to speak to a Sebi-registered investment advisor whenever you are in doubt.
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