Making investments today is just a matter of a few clicks or swipes, but what drives these investment decisions is not always the strong conviction or research behind the stock or mutual fund but emotions of missing out, greed, and fear. At InvestMates we do our research and due diligence to bring features and solutions driven by the purpose of helping investors avoid the mistakes they would generally make.
Why Investing Without a Purpose is a Problem
Investing without a purpose is like driving without a destination. You might end up somewhere, but it might not be where you want to be.
One of the most significant and common problems we have encountered to date is "Investing without a purpose". This problem comes when investors don't think about the impact of buying a stock and why they need to buy it. When you buy a stock just because your friend told you to do so and when it starts giving loss investors mostly struggle to exit as they are unsure assuming someday it will go up! But you never know if it will ever go up there's no guarantee. It keeps pulling investors down and down.
Investors generally don't know how much to invest in any particular stock or mutual fund but they keep buying, stocks investors sometimes buy more than hundreds of stocks. Investors must consider their principal investment amount and the proportional distribution of capital in the investments, for example as a standard rule a person having a capital of Rs. 10 Lakhs must not invest in more than 18 - 25 stocks and a minimum of 30% of total capital should go with first 5-7 stocks.
When making an investment decision it is not only your research and strong conviction that matters but also the objective and purpose of investment. Having a clear purpose in life and investing gives us vision, clarity, and confidence in what we are doing. An intelligent investor clearly understands their risk appetite and investment objective.
How Does InvestMates Help
Smart-Portfolio is a feature that we built just to tackle this problem and help investors achieve their financial goals. There are two types of smart portfolios
Goal-Based where you can pick a goal like Retirement, Buying a Home, Vacation, Car, etc. or you can create your own custom goal. Once you choose a goal give your goal a name, and target amount, and decide the timeline for achieving this goal. Next, you just have to add your imported investment to this goal. The purpose of Goal-Based smart portfolios is to give clarity to investors on how far are they from meeting their target and how much to invest.
Theme-Based portfolios as well where you can select your these as Long Term, Swing, EV stocks, Dividend Stocks, etc., or create your theme by giving a name and description and adding your investments to it. Theme-based smart portfolios are best for investors who invest not particular to a goal but in strategies, time frames, sectors, etc. to keep track of how it is performing.
We will also be adding more features to this main feature such as SIP planning, and investment standards for goals like Retirement, and Home Loan that would give better clarity to investors on how they can optimize their investment to meet their goals practically faster.
Our objective is not only to help investors track and manage goals but to help them achieve them. While there is a limit to what we can do with our features and release timelines I would be writing more such articles on specific and popular goals in wealth planning. Investors who are clear with their goals are sorted but I will also write about the discovery of goals to help investors build goals in case they are not sure about what goals should they have.
As the legendary investor, Peter Lynch, once said, "The stock market is filled with individuals who know the price of everything, but the value of nothing." It's a poignant reminder that investing without a clear purpose can lead to unwise decisions driven by short-term fluctuations rather than long-term goals.