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:
What Investment Planning is not?
Here are few things that Investment Planning is not:
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.