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The Role of short term sensations in the long term investments

by Holistic Leave a Comment | Filed Under: Uncategorized

In the digital age, the current affairs reach our living room 24*7. The power of internet and social media makes the news and rumours spread like a wildfire. Because of this information overload we become so focused on details that we begin to ignore the overall situation. If we are unable to see the wood for the trees, then we need to take a step back from the situation, to regain a wider perspective.

Many investors change their long term investments based on the short term sensational current affairs. They switch from risky investments to safe investments the moment they hear this. They ‘Act first and Think later’. This is very dangerous as far as investment planning decisions are considered.

Thailand and Europe:

In fact today, the investor’s biggest worry is not Indian market ; but the problem in the Eurozone.

Thailand faced a major natural disaster in 2011. Severe flooding occurred during the monsoon season. The World Bank’s estimate for this disaster means it ranks as the world’s fourth costliest disaster as of 2011.

Investors focusing only on the short term crisis advocated for a long term bear phase in their equity market. But Thailand’s equity market rebounded in the Q1 of 2012. This was possible because of the right kind of steps taken by the government such as simulative policy measures and reconstruction efforts. IMF now projects Thailand’s GDP to grow 5.5% in 2012 and 7.5% in 2013.

Similarly the European debt crisis has created a negative sensation among many investors. They started advocating for a long term bear phase in the European markets and other related markets. The fact is these markets have already factored this debt crisis. The possibility of further unexpected negative news seems to be very less.

In due course, this European crisis will settle down. The European leaders are determined to solve the fiscal deficit problem. They have enforced discipline on countries which have not fulfilled the obligations.

Of course the austerity recommendations will not happen in some countries. This is because of the bureaucracy or the lack of will by the locals. But the leaders are determined and resolute and have taken the bold and prudent decisions so far and moving in the right direction. They have taken steps which are painful for many in the short run but it has got the potential to produce a more positive long term result for each and everyone.

Investor’s expectation:

Investors are looking for a kind of assurance. Though they all know it is impossible, they expect positive outcomes and favourable news every day.
Even today investors remember the market crash of 2008. Sensex has fallen down from 20873 to 8160. It is a loss of 61% from the peak. But how many of us recollect the much faster recovery of 2009 and 2010 in which sensex recovered from 8160 to 21004. It is a gain of 157%. Investors remember the sudden market crash irrespective of they have experienced a loss or not. But they don’t recollect the much faster recovery if they have not gained out of it.

We all know the fate of investors who moved out because of the bad news about the market at the end of 2008 and beginning of 2009. They all have missed the faster recovery of 157%.

So whenever we hear a sensational current affair, we need to take a step back and look at the big picture to understand the REAL problem. This would be the holistic approach towards your investment decision.

Do the basics right:

So as to get better long term results as an investor you need to STOP reacting to Short term sensational current affairs. You should do the basics right. You need to invest your long term money in long term investments and your short term money in short term investments. Make an in-depth fundamental analysis on the investment scheme before investing.

Do periodic review and check if the scheme in which you have invested is not performing, because of the non-performance in the market or poor performance of the scheme itself. If the scheme itself is poor performing, then we need to cut our losses and move in to better performing scheme in the same asset class. If the market is underperforming, then we need not move out.

Timing Vs Asset allocation:

Timing is difficult and almost impossible. So instead of investing in a single asset class diversify across various asset classes by creating an asset allocation ratio based on the risk taking appetite and required rate of return. Then rebalance these assets periodically.

In spite of the short term sensational current affairs, these time tested investment strategies will give you much better positive outcome to your long term investments.

To have long term success with your investments, having a well drafted financial plan will be of immense help. To create a sound financial plan, I strongly recommend you to take advantage of our

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Jey S
Jey S
24. September, 2021.
I have been using Holistic Investment Planners for the last three years. Mr. Srinivasavaradhan answered all my questions and doubts very patiently during the first free consultation. I was able to clearly define my short-, medium- and long-term goals once I signed up for the comprehensive plan and got their investment plan suggestion to achieve my goals. They are very polite and highly professional whenever I contact them for any queries or make investments. They never pressurize you to invest on their recommended financial products. I would have been lost money by investing directly without their help since I do not have time and knowledge about different financial products. Risk planning is also done as part of financial planning. Truly, they are holistic planners when it comes to your financial planning. They help you to define your life goals, understand your financial resources and establish a plan to invest towards reaching those goals. They do review your plan as you progress to make sure that you are on correct path to achieve those goals. Kudos to the team and keep up the good work!!! I am happy that I found holistic investment planners for my financial planning and management.
aksaswadkar
aksaswadkar
24. September, 2021.
I was about to retire and really not understanding how to invest money to have financial freedom and fulfilling my goals. Was desperately searching on internet way out and fortunately came across Holistic Investment Planners. I read number of articles on their website and realized that this is the agency which I want and engaged their services for my retirement planning. It is an excellent experience to be associated with Holistic. Right from day one our interaction was fantastic and they gave me such a wonderful plan that I had never imagined. I am fortunate enough to be in the client list of Holistic. I have recommended Holistic to my friends as well.
Lionel Faber
Lionel Faber
16. September, 2021.
I've been availing their services for the past year. They are highly knowledgeable in the field and are very patient with all doubts and queries. Personalized financial planning is provided keeping your short term, medium term and long term goals in mind. They do not pressurize you to purchase schemes of their choice. They provide their input and suggestions and leave the decision up to you which shows their honesty and high principle.
Sridhar
Sridhar
8. September, 2021.
Financial planning brings peace in life. Holistic Investment have supported in arriving financial plan based on future goals. My investments are regular since then. They are professionals in their business, will recommend others.
Nitesh Agrawal
Nitesh Agrawal
6. September, 2021.
I have been using Holistic Investment Planners from last one year. The journey has been fantastic. Being a finance person myself I always thought we can look after and plan own finances also. However, due to lack of time and deciplain the things are not always as desired. After joining with Holistic Investment for the first time Icame to know the Financial goals and quantified them. Some dreams were unrealistic based on the earnings and savings so had a reality check. Also got the information and deciplain of investing on regular and more rewarding securities. I definetly suggest to use Holistic Investment Planners. They are professionals, available and hear youor full story before presenting plans. They are flexile in the sense if there are some urgent deviations required, they help to plan the same. For all professionals/individuals I would suggest using professional help of Holistic Investment Planners for best results in long term investment and financial goals achivements. Last advise will be to start early in your life. It really pays well to start in the beginning itself else the dreams needs to adjust :)
Swetha Vasanth
Swetha Vasanth
6. September, 2021.
This is my first year service with the Holistic Team and I would say that they are very much helpful in creating a financial plan and follow ups during the year. I would definitely suggest them if anyone who is willing to proceed with their savings professionally.
Joseph Mathias
Joseph Mathias
6. September, 2021.
I came to know about Holistic Investment Planners online while searching for different investment ideas. Once I contacted them the journey was very smooth. Mr. Ramalingam explained all the aspects of Financial planning in detail and it opened my mind. I realized how important it is to have a Financial planning. Mr. Rajan suggested all the requirements as per my goals and made a Investment plan keeping in mind of my goals. I started my Investment journey with them. I wish I had done it some years back then it would have been in a different level. Review meetings were held every six month to check the implementation of the plan and check the results as per the requirements and to check if any changes required. Overall it was a good experience with Holistic Investment team and would like to continue in the years to come.
Srinvas Kannan
Srinvas Kannan
30. July, 2021.
I came across Holistic investment planners almost 5-6 years back, but I did not have the trust since I had met a few of them who did not sound promising. Then I started investing through a financial advisor of my friend. After 4 years of investing the returns were very low. I was disappointed and started looking for financial advisors when I came across Holistic investment. I had a detailed discussion about my goals and the way they would approach achieving my goal before deciding to switch my investments to them. After a thorough analysis of my then existing portfolios, they suggested new ones and we zeroed-in on 6 schemes/funds where our investment would be split. I am glad I made the decision of switching over and taking Holistic planner's advise, my returns are handsome and I only wish I could have taken their help/advise 5 years back itself. Neverthless, I would like to recommend their services for investment and financial advise if someone is serious about their investments.
Shivaram Andiappan Selvaraj
Shivaram Andiappan Selvaraj
3. July, 2021.
I got a free first time consultation. I got my doubts resolved. They also gave additional advises for investment planning which was also useful.
Nellai B
Nellai B
26. June, 2021.
I have been associated with them for the past three years. They are very professional and polite in answering all our questions. I have complete trust in their suggestions. I strongly recommend for anyone. I am looking forward to have strong and successful association with them.
Google rating score: 4.4 of 5,
based on 61 reviews

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