Last Updated on September 4, 2018 at 10:19 am
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.
🔥Secure your future with our Robo-advisory tool trusted by over 3,500 investors and advisors. From effortless retirement planning to funding your children’s biggest dreams, turn your financial goals into reality. 🔥
Subscribe for money management solutions via email! (Link takes you to our email sign-up form) Join 32,000+ readers in our community.
👉 New Tool Alert! NaviPlan: A Privacy-Focused Multi-asset Tracker and Goal Planner 👈
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
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 Risk–Adjusted 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.