How to make an investment plan: Fair Finance

After determining your risk profile, the next step in your investment guide is to decide what to invest in. You can select from a variety of investment options based on your current financial situation, financial goals, and risk tolerance.

If you are a risk-averse investor, for example, you can choose safer investment options such as a fixed deposit and the Public Provident Fund (PPF). If you want to increase the risk exposure in your portfolio, however, you can choose high-risk investments such as direct equity or equity mutual funds.

In addition to the investment options you select, your portfolio should include life insurance to protect yourself and your family in the event of an unforeseen event. This, too, can be tailored to your risk profile.

You can choose a savings plan if your primary goal is to save money with guaranteed returns. If, on the other hand, you want to combine insurance with market-linked investments, a Unit Linked Insurance Plan is an option (ULIP).

This phase also includes asset allocation. This is essentially how much money you want to put into each of the options you’ve chosen. 

Monitor and rebalance

Finally, once you’ve decided on your investment options and how much money to put into them, you can sit back and relax. This reprieve, however, is only temporary, as you must constantly monitor and track your investment portfolio.

If your initial asset allocation is thrown off, you must rebalance your portfolio. Portfolio rebalancing is an essential component of any investment strategy. It must also be done every six months or once a year.

For example, suppose you have Rs. 1 lakh to invest today and want to start with a 70:30 mix of equity and debt. In that case, your initial asset allocation will look like this:

Rs. 80,000 in equity

Rs. 40,000 in debt

If the equity markets perform well over the next year, your investment value may change as follows.

Rs. 2,00,000 in equity

Rs. 1,00,000 in debt

In that case, you’ll need to rebalance your portfolio to achieve the original 70:30 split, as shown below.

Rs. 2,05,000 in equity

Rs. 1,05,00 in debt


This summarises the fundamentals of developing your investment strategy. Remember that this is just a starting point for your investment. You can always modify it to meet your specific needs. If you have any doubts, a financial expert is only a phone call or a meeting away. Before making a financial decision, make sure you have all of your questions answered.


What Should a Financial Plan Look Like?

A financial plan depicts your current financial situation, financial goals, and any strategies you’ve devised to achieve those goals. Details about your cash flow, savings, debt, investments, insurance, and any other aspects of your financial life should be incluaded in good financial planning.

What Is The Safest Investment With Highest Return?

High-quality bonds and fixed-indexed annuities are frequently regarded as the safest and most profitable investments. However, there are numerous types of bond funds and annuities, each with its own set of risks and rewards. Based on past performance, government bonds, for example, are generally more stable than corporate bonds.

What Is The Most Important Part Of a Financial Plan?

Budgeting is the most important first step in financial planning. Setting a budget is simple; sticking to it is more difficult! What matters is that you have the discipline to take the time and care to record and reconcile your expenses in some way..

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