3 reasons why your investments may fail

More than 70% of retail investors lose money in the stock market. Regardless of this risk, only 12% of Indian investors seek the guidance of financial advisors, according to a 2018 ET Wealth study. Most self-sufficient investors lose money despite investing for a long time because they do not understand these 3 basics:

• Allocation: You are not distributing assets wisely
• Risks: You are exposed to preventable risks
• Strategy: You Don’t Have an Investment Thesis

These 3 common issues were identified among clients seeking help from Finology Reserve (a SEBI registered Investment Advisory (INA000012218) firm).

Do you think your portfolio is also having problems? fill this in registration form To have a diversified investment plan designed for you by Finology Reserve, along with:

• Research-backed stock and mutual fund recommendations
• Capital security approach to long-term wealth creation

But first, let’s examine how Finology Reserve helps you solve the 3 main problems we discussed:

Reason 1: You Are Not Allocating Assets Wisely

According to a study by The Financial Analysts Journal, 91.5% of your portfolio returns come from asset allocation and less than 7% is attributable to stock selection. Let’s understand this with an example:

This means that if a portfolio returns 20%:

• 18.3% comes from proper asset allocation
• 1.7% from selection and market timing

But most investors get stuck in a similar pattern: When excess funds are available, they tend to follow the latest trending stocks or invest in low-yield policies recommended by relatives.

The result: a portfolio that is either overexposed to equity with little safety margin or too safe a portfolio with not enough wealth-building opportunities.

How the Reserve Allocates Your Investments:

It offers you a diversified investment plan that includes various asset classes and sectors. This creates the right balance between fast-growing assets and secure tools backed by research and a security-first approach.

Reason 2: You Are Exposed to Avoidable Risks

If you are chasing winners, you may be investing at the peak, and if you keep waiting for the right opportunity, you may miss the market rally. Either way, you can waste trying to time the perfect entrance and exit.

According to a study by SmartAsset Financial Advisor Survey, 52% of Financial Advisors said the worst investment mistake they see among clients is trying to time the markets. Long-term investing is much more effective than trying to predict market changes.

For example, if you had invested in Nifty 50 in any 7-year period since 1999, you would have gotten:

• 0% chance of loss
• 82% chance of achieving an annual return of over 10%

According to SEBI, only 3% of Mutual Fund units remain invested for more than 5 years, while 71% are redeemed in just 2 years. That is, only a few investors invest and most try to time the market with miscalculated exits.

Which Reserve Priorities Are For You:

The Reserve prioritizes capital security over short-term, risky bets through market timing and advocates a disciplined approach to investing through its various recommendations for long-term wealth creation.

Reason 3: You Don’t Have an Investment Thesis

Most investors do not have a clear investment thesis and rationale for their investments. As a result, their portfolios are full of stocks that are hot right now.

Without professional guidance, most investors choose flashy stocks over quality businesses. As a result, when the stock falls, they are left unsure whether to hold on in hopes of rebounding or liquidate and take a loss.

On top of this, a large portion of investors are continuing their losses without strong fundamental judgment waiting for a miraculous recovery. Know this: If a stock falls from 100 to 50, or 50%, it must rise from 50 to 100% to reach its original value. This highlights the importance of having a confident and clear strategy for maintaining investments during losses.

Where Reserve Invests in Your Growth:

The Reserve follows a strategic investment thesis that provides research-backed recommendations on fair valuations for stocks, mutual funds and other quality assets. This helps you build a strong portfolio that you can invest with confidence in market conditions.

Solution

Managing your wealth on your own can be risky. One wrong move can set you back years. It can easily become overwhelming, especially when juggling other important priorities in life. But here’s the good news: You don’t have to do this alone.

According to a report by Business Standard, nearly 77% of 1,000 wealthy individuals surveyed trust professional wealth advisors; UHNIs are the largest group seeking professional guidance.

You can too! All you need is the right guidance. Hire Finology Reserve Investment Advisor by filling out this registration form.

The Reserve’s risk aversion approach prioritizes capital security by focusing on risk-adjusted returns through a research-backed and diversified investment plan designed for you. Grow your wealth sustainably without dwelling on the rights and wrongs and let us put the money to work for you.

LEGAL WARNING: Investments in the securities market are subject to market risks. Read all relevant documents carefully before investing. Registration by SEBI, membership in BSL (in case of IAs) and certification from NISM in no way guarantee the performance of the intermediary or guarantee any returns to investors.