Lessons learned from mistakes serve as beacons of caution for the future. It’s that time of year again when we have to make new year’s resolutions, as is customary. You can begin your list with a mandatory emphasis on health and eating right, with a healthy dose of regular exercise thrown in for good measure. Though the desire to make money has always been present, it has never been more fashionable to talk about and discuss finance and investments than in recent years.
A financial resolution is another target that many people set for themselves as a new year resolution. If you’re in your twenties and thinking about setting such a goal for yourself, you’ve taken a giant step toward adulthood. However, when setting monetary goals, keep in mind to make them holistic. Budgeting, goal setting, savings, and investment plans should all be included. Most importantly, take a methodical approach. If you too are thinking of making investment resolutions, we here can help you.
6 New Year investment resolutions in 2023
Make responsible investments:
We’ve all heard about people debating the best investment scheme that helped someone become wealthy in recent years. We’ve heard about quick fixes that can help us create wealth. Armed with knowledge gained from best friend, ‘the internet,’ people begin investing in newer and fancier investment products about which they know very little. Cryptocurrency, peer-to-peer lending, futures and options, and many other options were all highly recommended as the quickest way to create wealth. They came highly recommended, but they also came with a risk. Many people lost money and learned valuable lessons. In 2023, we should vow to be more responsible with our money when investing.
Not every IPO/NFO will perform better:
As many people made money in the stock markets after the economy reopened after the Covid era, it felt natural to withdraw from other investments, even if it meant tossing carefully planned asset allocation to the wind and jumping on the bandwagon. What followed was a flurry of purchases based on “hot tips,” as well as NFOs and IPOs. The euphoria quickly faded as these “hot tips” got cold feet and many of the “golden IPOs” failed to make a dent on their listings. In 2023, we should resolve to be more cautious in our investment decisions and to avoid following hot tips.
Winners get everything:
While the indices reached new highs, some stocks had a mind of their own, acting stubbornly like a belligerent child and refusing to move north. If you are someone who believes in long-term relationships, and had a lot of faith in them (after all they had been purchased on hot tips by more successful investor). Your money was trapped in these, and you missed out on valuable opportunities to put it to good use. In 2023, we should intend to sell my loser investments, the intrinsic value of which is unlikely to recover!
Bad news does not have to mean staying away from the stock market:
The Russia-Ukraine war, combined with high global inflation, pushed many world economies into recession. As is typical in such situations, pessimism reigned supreme. Even as the world took precautions, the general consensus throughout last year has been that we are on the verge of massive corrections. The Indian markets, on the other hand, appeared to be immune, as they absorbed these blips and continued to rise. People took profits and, worse, stayed out of the markets, preferring the safe haven of Fixed Deposits and cash. While the markets continued to set new highs, you sat on the sidelines, waiting for the right moment. In 2023, we should make a resolution to invest in a disciplined and staggered manner rather than time the market.
Making regular investments keeping future in mind:
Read more: What are cryptocurrency cards? Should you use them?
“If you save after you spend, you will have nothing to save.” So stated Mr. Warren Buffet, the Investment Guru. Following COVID, many of us began to make random and luxurious purchases such as cars, laptops, dining out at fancy restaurants, and expensive vacations. This was a natural result of spending more than a year in captivity at home due to Covid restrictions. As our spending became more extravagant, so did our savings. Every time we skipped a few investment months, our future savings were set back by a few years! In 2023, we should resolve to be more in control of our spending and to be more committed to saving for the future.
Check your emergency fund:
While it is critical to ensure that you have enough money to cover all of your monthly expenses, including all other financial obligations, it is also critical to plan for emergencies. Consider putting money aside to be used on a hard days. Consider it an emergency fund, which you can use if someone in your family requires medical attention or if you lose your job. An emergency fund can not only help you avoid liquidating portfolio assets at potentially depressed prices during periods of market volatility, but it can also help you stay financially afloat in unexpected life circumstances, such as a change in your or a loved one’s employment situation. Saving three to six months’ worth of living expenses in a safe, liquid account is a good rule of thumb for an emergency fund. Remember, an emergency fund should be easily accessible. Hence, we should make a resolution to create an emergency fund in 2023.