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Financial Planning Mistakes You

Should Avoid in 2025 - 26

2. INVESTING WITHOUT A PLAN mistakes to avoid: By Mr. H.S. Bagga
Suppose you mix some random Ignoring risk tolerance: Are
ingredients into a pot hoping for you comfortable with the
a delicious meal. The results possibility of losing some
might not be as expected. The money in exchange for
same cab be said about your potentially higher returns?
investments. Investing without a Understanding your risk
clear strategy can lead to lower tolerance is crucial for
returns and missed choosing the right asset
opportunities. allocation.
Focusing on just one goal:
The key, therefore, is asset Most individuals often have
allocation. multiple financial goals with
different time horizons.
Asset allocation is the process of Effective asset allocation
dividing your investments should consider all the goals,
among different asset classes not just the nearest one.
such as
stocks, bond, real estate, gold 3. TINKERING TOO MUCH
etc.
While the stock market can be
The ideal asset allocation for an volatile in the short term,
individual will depend on their historical data shows that stocks
risk tolerance, investment goals, tend to outperform other asset
and time horizon. For instance, classes in the long term.
those saving for retirement in 20
years might have a higher So, should you adjust your
allocation to stocks as compared portfolio(investments)?
to those saving for a child’s There are some situations where
education in 5 years. Here are 2 making changes to your might
common asset allocation be necessary:

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