Top 9 Things Smart Investors Have in Common

Many people hope to make a fortune investing but only a few are really successful in this arduous task. Financial literacy and value investing are the buzz word in financial circles and new investors look up to already successful investment gurus for tips on both. Budding investors tend to follow and learn from moves those already successful investors or so call financial Gurus make. Time and again these experts and Gurus give out valuable advice and list certain dos and don’ts which can be really useful for budding investors.One of their foremost advices is to start planning and investing for retirement early. For the said purpose one of the most trusted names HDFC Life has introduced its HDFC Life Click 2 Wealth Plan, it’s a new age insurance with investment plan with the flexibility never offered before. With 3 plan options Invest Plus, Premium Waiver and Golden Years – Regular income plan there is one plan ideal for all needs. Other than that there are certain smart traits, advice and beliefs which are common amongst most successful investors.

Mentioned below are top 10 learnings and understandings that smart investors have in common:

Invest for the long term- Successful investors aren’t born overnight. A loss on paper orunderperformance against the benchmark is a temporary loss. The real risk is when one loses capital permanently. As long as one has a long-term horizon and a diversified portfolio, the risks are limited. Also they don’t act on impulse or haste, they understand that they have no control over the ups and downs of the market and economy, but they are the ones who decide how they choose to behave in a particular circumstance, which has a major impact on their performance. Wealth is built over a period of time and with HDFC Life Click 2 Wealth - Invest Plus Option one can save and build wealth along with the benefits of insurance cover as well as tax benefits.

Crisis breeds opportunity - Smart investors wait for the right moment. Few newbie investors perceive a fall in the market as a buying opportunity in the equity market. But all successful investors recommend one to be greedy for good scripts when others have no appetite for risk. To invest in difficult times, or even increase your deposits is a smart move. In fact as per many experts the more you watch the financial headlines and trade, the more likely you are to underperform and be eaten up by unnecessary trades and expenses.

Diversification - The old saying goes that you don’t put all your eggs in one basket, which is true for financial investments too. Successful investors also recommend having a diversified portfolio both in terms of investments and sectors. But even when well diversified, a portfolio is not immune to market downturns. However, it protects you from the risks of permanent losses to which you expose yourself by concentrating your money on a single source. But one should also avoid over-diversification as it is better to focus on a stock that will prove to be profitable, rather than diluting your results purely for diversification.

There are no shortcuts - Veteran investors have always stated that investing should be as exciting as watching paint dry or the grass grow. Investment is not exciting, if you want excitement head to a casino. They also understand that if a deal or opportunity sounds too good to be true it probably is. There are no shortcuts and free lunches in the financial world. Wealth creation requires time and effort.

Investment vs. Speculation - Successful investors understand that investing and speculating are two very different things. Even the smartest people don't have a crystal ball, so leave the forecast to the meteorologists. An investment is done after a rigorous analysis, and it promises the security of the invested capital and an adequate return. Speculating on the other hand is something completely different. So, one should invest and not speculate which covers the risk factor. Like with HDFC Life Click 2 Wealth - Premium Waiver Option the risks are covered. In case of unfortunate demise of the policy proposer one will receive waiver on all future premiums that needs to be paid.

Learn and Grow - Focus on learning and developing one's confidence. One good or bad decision doesn't define a successful investor. As experts put it, in the short term the market is a voting machine, but in the long term it is a weighing machine.Our brains are programmed to think that the more we work, the more results we have. But in terms of investment management, it's the opposite. So one should learn but also learn to keep it simple.

Appetite for risk - We can't repeat it enough - risk and returns are linked. One has to first measure their own risk appetite and plan their financial journey to beat inflation and to achieve their financial goals. The returns will depend on the effort that the investor will deploy in building his/her financial portfolio. If one seeks security and serenity, they can choose to be a defensive investor and enjoy more modest returns. However a more substantial return will go to the more enterprising investor, who is willing to shoulder the risk and play boldly yet intelligently.

Don’t follow the crowd - It is said that in the financial world one gets rich slowly or gets poorer quickly. Avoid falling into the trap of following the crowd. If one comes to a conclusion that is based on the facts and knows that he can trust his judgment, then he should take action, even if others seem to hesitate.

Start early, stay consistent - To reap the best benefits, experts recommend to start investing early and to be consistent. This approach also ensures compounding of returns, which in turn helps wealth creation.The old saying that Rome was not built in one day is particularly true for successful financial investments. One of the ways to stay true to this very advice is to opt for the HDFC Life Click 2 Wealth - Golden Years Benefit Option.With this plan one receive insurance cover for their whole life along with lump sum benefits on maturity along with additional mortality charges that will be added to the fund value at the end of policy year.The market linked plan is a one stop solution for all your insurance and retirement needs.