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Valueraj Associates Private Limited

Personal Associates for your Personal Finances

Investment Planning

Investment Planning

What is Investment Planning?

All of us, earn money, spend part of it for our living and save the rest for our future. You may be further deploying these savings into some investments. Investment means an asset that is purchased with the hope that it will generate income or appreciate to a higher price at the time of selling it later. Typical investments include bank deposits, bonds, stocks, mutual funds, gold, real estate etc.

Although you are investing, you may be doing it in an arbitrary and ad-hoc manner. Instead, Investment Planning is about making investments exactly to meet your financial goals in future. The goals can include buying a home, saving for child’s education, going on foreign vacation, planning for retirement etc. It is about deploying your savings into the proper investment instruments based on your goals, priorities, time horizon and risk appetite. It takes into account the inflation expected in the economy and also the returns expected from the instruments. In effect, Investment Planning helps you achieve corpuses on-time to meet your goals.

Investment Planning is in fact a part of Financial Planning. It is a process, not a product. This process involves (a) collecting all relevant data on your current assets (b) identifying your financial goals (c) analyzing the data for suitability of assets to achieve goals (d) calculating the deficits to meet each goal and (e) recommending additional investments required to fill the deficits and meet goals on time in future.

The outcome of Investment Planning process is a ‘Investment Plan’ document. This document spells out a strategy unique to your goals by mapping current assets to your goals and then specifies how much to invest and how long to invest to meet any shortfall. It lays out a roadmap for your future investments and if you follow it, you should be able to meet your goals automatically.

Why should you have an Investment plan?

Investment Plan provides clarity and purpose for your investments. A few but not all benefits are:

  • You will define your financial goals exactly in terms of needs and wants in future. Meeting needs is a must whereas meeting wants is a choice.

  • You will know how each of your current assets is matched and utilized to meet one or more of your goals in future.

  • You will know whether your current assets are enough to meet your goals or not. If not enough, how much, how often and how long to invest to make up for the shortfall.

  • You will know what are the instruments suitable for investing to meet a particular goal. The suitability depends on time horizon of the goal, inflation in the system, historic returns of the instrument and taxation of the gains from it.

  • You will know for how long to risk your investments and then de-risk them as you approach your goal and meet the goal comfortably.

What Investment Planning is not?

Here are few things that Investment Planning is not:

  • Investment Planning is not about finding best performing stocks or mutual funds.

  • Investment Planning is not about timing the asset markets and maximizing the returns.

  • Investment Planning is not jumping in and out of asset classes, trends and bubbles.

  • Investment Planning is not for impatient, indisciplined and greedy people!

How can we help you?

We are Certified Financial Planners by qualification and Mutual Fund Distributors by profession. We provide ‘Investment Planning’ service to individuals and families. However, we provide this service only as incidental to distribution of Mutual Funds.

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