Ten Questions Every Investor Should Answer

Published: August 27, 2014 at 5:02 pm

Last Updated on

Here are ten questions that every investor should answer. I have inserted links to relevant posts for some questions.

If you are DIY investor or intend to be one, ask yourself these questions. If you have engaged a financial planner, ask these questions to the planner .

If  you have any suggestions that would help us all answer these questions better, I am all ears.

A suggestion: please copy these questions on a word processor and answer them. Include relevant links etc.

Here goes:

1) Have I listed all my financial goals, categorised them as per duration and decided on suitable asset allocation for each goal?

2) Have I determined how much I need to invest for each goal as per the intended asset allocation?

Related posts: A Step-By-Step Guide to Long Term Goal-Based Investing

3) Have I determined how much I can invest for each goal and begun investing?

4) Do I have a plan to tackle the shortfall in the investment amount?

5) Is my portfolio diversified across asset classes and diversified within each asset classes?

6) Am my monitoring my investments month by month? Am I maintaining a schedule?

Related posts: Monthly Financial Tracker

Join our 1300+ Facebook Group on Portfolio Management! Losing sleep over the markt crash? Don't! You can now reduce fear, doubt and uncertainty while investing for your financial goals! Sign up for our lectures on goal-based portfolio management and join our exclusive Facebook Community

 

7) Am I monitoring my net  portfolio value and returns for each goal at least once a year? Do I know if I am on track wrt each goal and if not, have I determined the cause? If my goal is to build wealth, am I tracking the CAGR and taking steps to

Related posts: Automated Mutual Fund and Financial Goal Tracker

8) Do I know how to measure risk of an instrument or portfolio? Do I understand the idea of risk-adjusted return? Do I understand the importance of downside protection?

Related posts: 

Simple Steps to De-risk your portfolio

Understanding RiskAdjusted Return

9) When do I exit a poor performer? Do I look at only returns? Do I look at the nature of the holding and make a call? Am I  tracking the holding month by month (eg, mf portfolio)?

Related posts: Mutual Fund Risk and Return Analyzer

9)  Do I know the importance containing portfolio volatility? Do I know the importance of rebalancing?

Related posts:  The What, Why, How and When of Portfolio Rebalancing With Calculators to Boot

10)  Am I going to be a ‘buy and hold’ investor or am I going to use ‘tactical asset allocation’? If I am going to make tactical calls, have I decided on what basis am I going to act? PE ratio, PEG ratio, FearGreedIndex, GDP? How am I going to ascertain  the ‘state of the market’?

Let me add one more which can be handled down the line.

Join our 1300+ Facebook Group on Portfolio Management! Do not lose sleep over your bleeding portfolio: Learn how to reduce fear, doubt and uncertainty while investing for financial goals! Sign up for our lectures on goal-based portfolio management and join our exclusive Facebook Community

Hate ads but would like to support the site? Subscribe to our ad-free newsletter and get beautifully formatted full articles delivered to your inbox!

About the Author

Pattabiraman editor freefincalM. Pattabiraman(PhD) is the founder, managing editor and primary author of freefincal. He is an associate professor at the Indian Institute of Technology, Madras. since Aug 2006. Connect with him via Twitter or Linkedin Pattabiraman has co-authored two print-books, You can be rich too with goal-based investing (CNBC TV18) and Gamechanger and seven other free e-books on various topics of money management. He is a patron and co-founder of “Fee-only India” an organisation to promote unbiased, commission-free investment advice.
He conducts free money management sessions for corporates and associations on the basis of money management. Previous engagements include World Bank, RBI, BHEL, Asian Paints, Cognizant, Madras Atomic Power Station, Honeywell, Tamil Nadu Investors Association. For speaking engagements write to pattu [at] freefincal [dot] com

About freefincal & its content policy

Freefincal is a News Media Organization dedicated to providing original analysis, reports, reviews and insights on developments in mutual funds, stocks, investing, retirement and personal finance. We do so without conflict of interest and bias. We operate in a non-profit manner. All revenue is used only for expenses and for the future growth of the site. Follow us on Google News
Freefincal serves more than one million readers a year (2.5 million page views) with articles based only on factual information and detailed analysis by its authors. All statements made will be verified from credible and knowledgeable sources before publication.Freefincal does not publish any kind of paid articles, promotions or PR, satire or opinions without data. All opinions presented will only be inferences backed by verifiable, reproducible evidence/data. Contact information: letters {at} freefincal {dot} com (sponsored posts or paid collaborations will not be entertained)

Connect with us on social media

Our Publications


You Can Be Rich Too with Goal-Based Investing

You can be rich too with goal based investingThis book is meant to help you ask the right questions, seek the right answers and since it comes with nine online calculators, you can also create custom solutions for your lifestyle! Get it now. It is also available in Kindle format.
  

Gamechanger: Forget Startups, Join Corporate & Still Live the Rich Life You Want

Gamechanger: Forget Start-ups, Join Corporate and Still Live the Rich Life you wantThis book is meant for young earners to get their basics right from day one! It will also help you travel to exotic places at low cost! Get it or gift it to a young earner

Your Ultimate Guide to Travel

Travel-Training-Kit-Cover-new

This is a deep dive analysis into vacation planning, finding cheap flights, budget accommodation, what to do when traveling, how traveling slowly is better financially and psychologically with links to the web pages and hand-holding at every step. Get the pdf for Rs 199 (instant download) 

Free Apps for your Android Phone

Comment Policy

Your thoughts are the driving force behind our work. We welcome criticism and differing opinions.Please do not include hyperlinks or email ids in the comment body. Such comments will be moderated and I reserve the right to delete the entire comment or remove the links before approving them.

Leave a Reply

Your email address will not be published. Required fields are marked *