Invest & Chill – New Mantra of Investment

Here is a new Mantra on Investment i.e Invest & Chill. Know how you can Invest & Chill at the same time.

When it comes to savings, Indians have traditionally opted for some of the low-key investment options like keeping the money in a savings account or simply making multiple serial FDs.

However, all this used to do, was merely beat the inflation, while resulting in mediocre levels of growth and returns.

Moreover, today’s savvy investors no longer prefer how their parents treated their savings.

FDs are out of fashion, and the rates of return are falling out of the pace at which present-day Indians expect their money to grow.

So, many turn to the stock markets for an answer. In fact, more and more Indians are entering the stock markets with expectations of a better bang for their bucks.

But in this process, many risk-averse investors often get the stock markets wrong, or some stories of deep losses tend to scare unsuspecting individuals away from the stock markets.

Stress and worries about the potential risks of losing money through stock market investments are often pitted against the possibility of better avenues of growth.

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Invest & Chill

One shouldn’t have to experience stock markets as a trade-off between worry and stress, and the possibility of growth.

That’s why here are three mantras for growing your money without having to worry about it!

#1 Diversification is the medicine for both risk and worries

When experienced investors talk about diversification, they are coming from a place of realistic expectations and experience to back up their position.

Because if one enters the stock markets in a period of growth, all avenues that are labeled as high risk are likely to reward well.

But when the economy experiences minor or temporary setbacks (and it inevitably does over a long period of time), that’s when those high-risk investments need to be balanced with low-risk ones.

The idea behind diversification is well understood – that one simply does not put all one eggs in one basket.

But here is what diversification also does for investors – when one sees all their investments going down by double percentage digits, they are more likely to panic and sell precisely at a time when they should have simply held on to their investments for a little while longer.

But if one swallows the diversification pill early on, they will see their low-risk investments offset the high-risk ones – which will not only help minimize the fear of losing money but also prepare them to make more informed and rational rather than emotional decisions.

Because it is a well-known fact, that humans make more emotional decisions when they are under stress.

So diversify early on, and invest your money in multiple instruments – some in sectoral mutual funds, some in bonds, and some in bank FDs.

A mixed bag is less likely to result in a setback when the markets are being stress-tested!

#2 Consider Low-Touch Investment Options

And what does low touch mean here? There are some types of stock market investors that buy highly volatile stocks that move by significant percentages daily.

For the less experienced investors, such stocks are the perfect recipe for stress, worry, and consequently, rushed decisions.

The idea behind low-touch investments is that one doesn’t have to revisit their decisions and re-evaluate them now and then while the markets are swinging wildly.

There are many ways in which investors can make their investments low touch.

The first is to opt for some mutual funds that have shown relatively consistent growth over the last few years, rather than a high fluctuation growth curve.

Another is to automate the portfolio rebalancing strategy if one is holding stocks that are prone to growing out of step and significantly alter the risk composition of the portfolio with time.

#3 Learn from Past Experiences

Stock markets have been around for more than three centuries. Over the course of these years, the markets have crashed more than once, and traders and investors have made the same mistake of panic selling over and over again.

However, in this digital age, investors no longer have to follow in the footsteps of their predecessors.

Learning from the history of stock markets, one can conclude that no matter how strong the setbacks are, they tend to flatten out over the long run.

This makes it crucial to invest for the long run and to refrain from selling the portfolio for cash when the markets are down.

Because right after the setback comes to the bounce back – and the experienced investor is actually buying when everyone else is selling. #InvestAndChill is, therefore, really about finding the right balance in the stock markets and aiming for growth without adding to worries and stress.

However, exposing savings to the stock market has its upsides and downsides. While investments must ideally be stress-free and rewarding, achieving this golden balance requires skill, practice, and more importantly, a calm and composed mindset that doesn’t react to the news with panic. #InvestAndChill is as much a way of life as it is a way of investing.

Invest & Chill – Conclusion

Time to put these mantras to practice. So, to recap – don’t forget to diversify investments, because diversification will save an investor from both risk and worries.

Second, consider investing in instruments that require less frequent check-ins. And lastly, don’t stop learning from past experiences with the stock markets! Good luck, and #InvestAndChill!

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