Where should I invest?

Where should I invest?

I get this question pretty frequently nowadays, where should I invest this chunk of money? People pose this question either on WhatsApp chat or call and at times they do schedule a tea break to ask this question. Few strangers ask me on Quora too. This simple and innocent question is not as easy to answer as it is asked.

One thing they​ forget to understand is there is no single answer which fits everyone. If you copy other’s investment strategy then you risk your investment big time. Copy-Paste is relatively dangerous, especially in Finance, and probably hence it is called Personal Finance. Every situation is different and there’s a product to fit that unique situation. All one has to do is understand the situation and map it to the goal and ultimately to a good enough product. That’s all. It’s that simple.

At times I do try to explain the process of mapping situation to the goal and ultimately to the investment so that they have clear targets on When they will have to redeem and How much. But their naïve behavior, negligence and probably at times their overconfidence makes them ignore all the talk about the process. They force me to conclude the discussion with one magical fund which will solve their investment dilemma, which I oblige most of the time.

When someone asks me this question, I do feel overwhelmed because they considered me knowledgeable enough to discuss such matters. But I feel really happy when such question comes from someone who is just starting his/her career, as it happened this week. They are in their middle twenties without many obligations, hence not many long-term goals either. They have just entered the second phase of the four phases we discussed earlier. They can and should invest aimlessly till the time they are free with all of the life’s obligations. But once they start having them they should realign they investments with goals so that they can answer when and how we discussed earlier.

If you do not have set goals then it makes sense to invest aimlessly but if you have set goals or you are ignoring them then you are risking your investments. And the problem is that nobody can stop you doing that, except you yourself stop making aimless investments.

Do not forget to re-assess your goals and realign investments accordingly every few years, as your risk tolerance changes according to our life events.


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Also published on Medium.