Developing A Proper Investment Strategy For Financial Success

 Prakriti Nepal

Investment Strategy: Be Friends With Investing

Building an empire, running life smoothly, to gaining return- isn’t possible merely through the collection of wealth. If there’s a willingness to soar what we have as fixed and current assets in banks or in our homes; our pursuit towards investment needs to escalate. Assets bought and finances and capital we have accumulated, need to provide upright interest. This is the mainstream elucidation of investment.

Investment strategies basically touch upon management practices for larger earnings. It is no less than a business plan and leads to portfolio creation for you. Today, due to technological advancement, anyone sitting in any nook and cranny of the world can make investment decisions; whether it be a retired person or a teenager. You need to understand which investment strategies suit you by mastering the legibility of purpose that led you to decide upon investment decisions. Conceptualize your thoughts and strategies that you shall take to invest, through a clear understanding of your passion for investment strategies. You cannot haphazardly start investment without legitimate discernment of investment strategies.

If you invest your money without proper knowledge and conceptual planning of investment decisions and investment strategies; it would be like, letting your money flow out, like traveling with full enthusiasm but finishing your money in a middle way without completing all your travel bucket lists. It would be like buying a honey farm, without the love for bees and with fear of bees or like a kabaddi game, where the opponents will pull you down with full effort if you are not mindful and strategic in the game.

Hence, Investment strategies should be your winning game plan and moreover your growth master plan.

Buy and Hold Investment Strategy: Explained

Create a Circular or a Leaflet

Any work done without proper coaching can lead to a confusing path. Likewise, for making investment decisions, you must create your own set of Folders where you stock your leaflet/Circular that would have bullet points and FAQs leading towards Roadmap on Investment.

If you already have a coach, then that would be great guidance but if your decisions are self-paced then, you need to lay out a PLAN on your own.

Theorizing is important but quantifying into numbers and figures can sum up the predictable results. Write down what is the PURPOSE through/of investment which you are trying to fulfill?

Create a Priority Table and jot down your small to big goals in the table component field and start prioritizing like P1 for super necessary, P2 as secondary, and so on.

Segregate the prioritized goals in a manner like- Time Period of Goal Achievement: 5 years, End Goal: To purchase a Farm House, Beginning Achieving Point: 12% average return per annum.

Formulate specific, detailed objectives for your prioritized segregated goals- individually and in a larger perspective. This will give you a Portfolio Blueprint along with Timeline and Deadline for achievements via investment strategies and their implementations. Think, formalize and process- how you can double your Sum or Triple your Sum (remember to not make it vague- rather make a more quantitative and qualitative balance) within a certain allocated time frame. Write down all the possibilities.

Different Investment Strategies: Are they Worth Executing?

Let us find out!

1. Investing For Income?- Income Investing

Without having a genuine source of income, the investment will always be shaky with a lack of confidence. Income investing is like being a salaried fellow as the return of it would be slow and steady and confines in a timeframe. Some of the investment options for income investing are:

– Bonds and Debenture

– Mutual Funds

– Investing in Real Estate

The pros and cons of Income Investing are that- the return is certain with profit being uncertain. In the current scenario of Nepalese Investment ground- it has been seen that a lot of ups and downs has taken place in Real Estate Investment (REI), due to the persistence of middlemen in buying and selling of real estate – which has created friction and price changes frequently- and- is not a healthy upheaval growth, because there are a lot of risks involved. Though, it also indicates the booming of REI, while it is from REI that people are becoming richer and are contributing towards the GDP of a nation in an influential approach. However, proper planning, initiation of Real Estate Investment Trusts (REITs) is missing and should be formalized.

Similarly, in Nepal- Bonds and Debentures are not as hustled when compared to Stocks; even though, Bonds continue to be a safer option in the investment market throughout the world with the fixed scheduled returns. This also shows that the entry into Bonds and debenture markets can lead to self-starter growth- though very slow and not manipulative as Stocks.

2. Riskier Strategy In Investment- Growth Investing

With the boom of tech companies, small- to large along with the boom of angel investors, a BOOM of growth investment has definitely taken place. Whether it be in Nepal or outside, various Angel Investors are investing in prospective change-making startups and eCommerce, or logistics and procurement and retail experience businesses. These blue-chip markets are the current glamorous field to enter with lots of marketing and sales gimmicks being performed through communications and media usage. Idealizing big companies like Amazon, Google, Tesla has also created a sense of security to invest in companies that have POTENTIAL and PURPOSE.

So what can be the cons of Growth Investing? There can be endless cons; From threatening board of Directors to unstable staff, lack of human resources to idea stealing, Non-trustworthy Finance Employees to Insecure Partners. It is very competitive!!

Though, if the company does well, then it’s a long-term Gain and sustainability- with name, fame, and money. Moreover, Growth Investment needs to be service-driven at its core. What you invest shall be returned only if you have the willingness to give it back to the society or human race in a positive way.

3. Small-Cap Investing

A Small-Cap Investing market is a generous market with generous returns as profit or as a loss. It is where you get what you put in, but involves a lot of luck and study of trend, technicality, and fundamentals.

You can invest with a 100 Rupee or 100 Arba- the choice is yours with risks involved caused through Political, Environmental, Social, Legal, Technological, Economic (PESTLE) changes and swipe.

The good thing about small-cap investing to investors is that- you can earn a lot without being noticed since you invest in smaller companies intentionally. These companies would involve few decision-makers which is a plus point whereas in some cases there might be hidden investors or owners who can be manipulative to get things done in their set non-positive way.

This can be kept a secret somewhat and won’t involve much human risk. Yet, the risks may surpass the benefit as everything that you have earned may go in vain with smaller decisions that happen in a country.

Also Read: Small-Cap Stocks Vs Large-Cap Stocks

4. Investing In Stocks/Shares- Value Investing

A research-based approach is a right move towards value investing. Popularized by Warren Buffet, Share Market can be as vulnerable and as stiff as the knowledge of the players in the market may have.

A lot of Technical and Fundamental Analysis, along with Peer Pressure, Surrounding Influence, Political Turmoil, International Situation, Newness Factors play role in the way forwarding the share market. It is luck-driven- Yes!! But not totally. You need to know and find out which companies’ shares would be fit for you too which companies’ shares would bring exponential waves in the market.

You can be a Top gainer or a Top loser when it comes to Stock Market Investing but to be a Breadwinner/ Average winner slanting towards the gaining side should always be the focus.

We are all aware of SEBON’s decision, the decision that has wobbled the share market in recent days in Nepal.

The Pros and cons of Value Investing are more like a Maize Chase- whoever cracks the code is the winner and whoever gets tangled is the lagger. It also involves a lot of networking and power play- basically an amalgamation of reach and knowledge.

5. Being A Socially Responsible Investor (SRI)

Service as a heart of entrepreneurship and growth that involves a team, user, buyer, and giver- a giver who returns back to the society generating a positive vibe, aura, benefit through thought-provoking dimensions- that would lead to drastic change is a nub of Socially Responsible Investor. However, it is not always so and there might be Rat in the Matter with hidden interests to be portrayed as Socially Responsible Investor sometimes.

Investors invest in environmentally and sustainable CSR-focused charities. Though, tactically maintaining your Taxes by donating them to nonprofits will lead to a cycle of pros for the investor in a larger sense. It (SRI) is more of a win-win situation for the investor as well as the receiver and a mid-way to avoid risks strategically.

This kind of investment is seen being performed by big multinationals throughout the world. The con that might be involved would be in terms of transparency as the process is depicted within the system and is not outgoing and open. A lot of IT companies, tech companies have been seen following socially responsible Investment around the globe.

Analysis Of Strategy Formulation Itself Is An Investment Strategy

Patience is the key when it comes to the usage of analysis in Investor decisions. Whether it be an investment that involves high risks, to investment decisions that can be passive and short-term; you have to have done various layers of analysis before starting investing. You can be:

– Actively Involved Investor

– A long Term Strategist Investor

– A short term risk-taker investor

– A investor that would buy and hold

– A investor that would invest and sell

From maintaining saving accounts to purchasing stocks/shares, bonds, gold, mutual funds, crypto, bitcoins, dogecoins, companies, real states, startups, eCommerce, fixed assets, – you can purchase and waive your investment in the way you finalize. The cruciality is, however, to perform the best possible analysis before the investment.

We Are Destined To Invest? So, Where To Invest?

We as humans are destined to perform something powerful which can give the best returns to us as well as to the society we live in. The question may arise; which are the best investment strategies? So, the answer would be the one that is purposeful to you and to the service in entirety by recognizing your Passion and Your Potential and Finding Out- where you can outperform and glow. You need to do a lot of research and find the perfect targeted investment markets for the best returns. Find your thoughts and your dimension and where your soul drives you to invest your assets, your money, your hard work for optimum results.

Create investor relations, build resources that are strategic and target-oriented. Understand the strengths, weaknesses, opportunities, and threats of the investment that you would want to do. Become SMART in your decisions and WISE in your competitiveness. Realize your competitive advantage, transformational capability to gain your momentum and stick to the investment market scenario. Getting started always gives butterflies but reaching the optimum marginality curve will generate satisfaction and enhance your knowledge with each passing day.

Simultaneously, interpreting the businesses’ roles and responsibilities and vision and mission of your investment strategy and decisions in alignment with vision and mission on the various types of investment portfolio and firms will demonstrate your proficiency and precision to ease out the process of Investment.

Allocation of your money or your assets like allocation of your trusts with embarking your investment strategies and decisions will help to build an empire of your own. Along with Investment in various markets, invest your time and effort in People, Processes, and Positive Power generation by utilizing available capital. Deep Pockets analysis and full commitment towards reducing your costs and enlarging your fetch in a deliberate, calculated, and tactical manner will marshal towards gain. Also, utilizing Predictive Analysis Software, creating a co-existing market influence will bring substantial benefit.

From The Author:

Basic Knowledge For Beginners In Share Market Of Nepal

History Of Market Bubbles And Crashes: Lessons To Be Learned

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