Long Term Financial Management
How to manage!!!
Great, now I know my long term savings choices. But I still don't know how to manage them.....
Lack of knowledge:
point B in a vehicle. If your vehicle selection is right, in this case fast vehicle then you will reach your destination faster, Isn't it!
enter and exit the markets at the "approximate" right time with proper funds selection. Remember, its the game of probability, all we need to
do is make sure our odds of winning are higher.
you are already invested in bunch of financial instruments, in short you are already diversified. Investing in 3 Mutual Funds means you have
more than enough diversification as you are well secured.
Remember:-
More diversification = Less returns
Balance your risk and reward
not good, we move money from Other Mutual Funds to Money Market Fund and enter back at the right time.
Are you with me so far!!!!
Lack of knowledge:
- What funds to select from the limited choices I have?
point B in a vehicle. If your vehicle selection is right, in this case fast vehicle then you will reach your destination faster, Isn't it!
- I do not have enough knowledge to pick the right funds
enter and exit the markets at the "approximate" right time with proper funds selection. Remember, its the game of probability, all we need to
do is make sure our odds of winning are higher.
- How many funds shall I diversify my savings into?
you are already invested in bunch of financial instruments, in short you are already diversified. Investing in 3 Mutual Funds means you have
more than enough diversification as you are well secured.
Remember:-
More diversification = Less returns
Balance your risk and reward
- Can I avoid getting sucked into financial crisis?
not good, we move money from Other Mutual Funds to Money Market Fund and enter back at the right time.
Are you with me so far!!!!
OK! So whats the Technique or Strategy?
We call it BdIAS (Breadth driven Investment Allocation Strategy) approach. The Strategy & Techniques used here applies to Mutual Funds & ETFs (Exchange Traded Funds) as these are relatively slow moving financial instruments compared to stocks but fast moving instruments compared to bonds. Do not use same strategy to trade stocks as individual stocks are prone to more fluctuations based on company news, earnings and other influences.
I am confused...
Before we explain the BdIAS approach, you need to have some basic understanding of Mutual Fund and ETF.
Typically, you would invest funds from long term financial accounts in Mutual Funds, Bonds, Trusts, etc.
What is a Mutual Funds?
Click on the link above and read some basics just to understand what it means, NO need to go in lot of details but you should understand what it is at
a high level.
What is a ETF (Exchange Traded Funds)?
Click on the link above and read some basics just to understand what it means, NO need to go in lot of details but you should understand what it is at
a high level.
We will not cover bonds, trust and other types of long term instruments here as they are slow moving financial instruments.
I am confused...
Before we explain the BdIAS approach, you need to have some basic understanding of Mutual Fund and ETF.
Typically, you would invest funds from long term financial accounts in Mutual Funds, Bonds, Trusts, etc.
What is a Mutual Funds?
Click on the link above and read some basics just to understand what it means, NO need to go in lot of details but you should understand what it is at
a high level.
What is a ETF (Exchange Traded Funds)?
Click on the link above and read some basics just to understand what it means, NO need to go in lot of details but you should understand what it is at
a high level.
We will not cover bonds, trust and other types of long term instruments here as they are slow moving financial instruments.