10 investing tips from CA Rachana Ranade

Whether you are planning to retire in your mid 30s or aiming to steadily build long-term wealth, smart investing is important. But navigating through the world of markets can be challenging, especially if you are a beginner.

This is exactly why you need to know the foundations of investing before diving into market trends. Here are some investing tips from Chartered accountant and Finfluencer Rachana Ranade. “To become a successful investor, you need to have an understanding of the markets and a strategy that works for you,” she said on her website.

Set clear, smart goals

Now investing is a good idea to build wealth, but knowing what you want to achieve is important.

Ask yourself why you are investing the money. Are you saving for your retirement or for your child’s education? “Set specific goals and create a plan to achieve them,” she said.

Diversify your portfolio

Never bet everything on one horse. That increases the risk. Instead spread your money across asset classes (equities, debt, gold, real estate), sectors, and geographies. This way, when one area underperforms, others can compensate.

Invest for the long-term

According to Rachana, investing is a marathon, not a sprint.

She advises against making short-term investments. Instead, she suggests making long-term investments. “Focus on your long-term goals and stick to your plan, even during market downturns. Have you seen a seed grow into a tree in a few days? No, it takes time. Similar is the case with investments,” the CA explained.

Don’t be emotional

The stock market rewards patience more than it rewards intelligence. So it is important to stay rational, and avoid impulsive decisions.

She emphasizes that fear and greed should not control your investment decisions.

Research is important

Now, you are investing your hard-earned money. So, do your research. Rachana suggests exploring the company or fund's financials, management team, and industry trends. You should be aware of the risks and potential rewards.

Eyes on fees

Investing fees are a silent killer. Initially, it may look small, but a 2% annual expense ratio may seem harmless, but in 25 years, it can consume a third of your potential returns.

“Look for low-cost index funds and ETFs, and be wary of high management fees and transaction costs,” she said.

Tend your portfolio

Consider your portfolio is a garden and tend it regularly. As some time passes, there might be an imbalance in your portfolio, as some investments outperform others. So restructuring your portfolio is important. “Rebalancing can help keep your portfolio aligned with your goals and risk tolerance,” she said.

Be aware

You don’t have to be anxious about your portfolio, but awareness is important. “Stay up-to-date on market news, economic indicators, and political events that could impact your investments,” she said. Rachana also emphasized that, however, this should not distract you from your long-term plans.

Hire a professional

Now the most important part. If you are new to investing, you may need some professional advice. The same is the case for a large portfolio.

So you must consider working with a financial advisor. “A good advisor can help you create a personalized plan, manage risk, and achieve your goals,” she said.

Turn mistakes into tuition

Learn from your past mistakes. Rachana reminds us that investing is really a trial and error. So don’t be afraid or too hard on yourself about the mistakes. “I remember a quote by Theodore Roosevelt, 'The only person who never makes mistakes is the person who never does anything.' So, I will say just go out there, take risks, and learn from your experiences, only then will you succeed,” she said.