With lot of action expected from Modi led NDA government, growth expectations is also rising. Most of the analysts believe that we will achieve 7% GDP growth by FY 2015-16. Considering the same, Indian stock market continue to move northward with major indices - Sensex and Nifty making news highs every month.
Stock prices are on rise and retail investor participation has also increased significantly compared to last year. As many new investors get into stock market during such times, its always important for an individual investor to understand what is his/her investment profile and risk tolerance.
We always suggest our members not to time the market and follow a disciplinary approach while investing in equities with medium to long term perspective. Its important to know, whether you would be able to hold on your positions in case stock market tanks? Historical data indicates that most of the new investors get fascinated towards stock market to make quick bucks and finally end up loosing their capital as they cant hold on their stocks in case market corrects and sell out their stocks in a panic. Stock market is not a money making machine, you need not to be greedy on rising market or fearful when stock market falls, simply buy right and sit tight having sufficient patience with you to see your investment growing over a period of time.
We strongly recommend our members (who are new to stock market) to kindly go through our Asset Allocation Questionnaire to understand your investment profile and risk tolerance.
By answering 15 questions about your risk preferences, you can find out your investment profile and risk tolerance. This score will determine the asset allocation that best suits your risk preferences, you can use our simple excel workbook - Saral Gyan Asset Allocation Questionnaire which suggests the optimum split between cash, bonds and stocks.