3 reasons your investments are failing | Stock Market News

Over 70% of retail investors lose money in the stock market. Regardless of this risk, only 12% of Indian investors seek the guidance of financial advisors, according to a 2018 ET Wealth survey. Most self-guided investors, despite investing for a long time, lose money because they don’t understand these 3 key aspects:

• Allocation: You don’t allocate assets wisely
• Risks: You are exposed to avoidable risks
• Strategy: You don’t have an Investment Thesis

These 3 common problems were identified among clients who sought assistance from Finology Reserve (https://reserve.finology.in/), a SEBI-registered Investment Advisory (INA000012218) firm.

Do you think your portfolio is suffering, too? Fill out this enrollment form to get a diversified investment plan designed for you by Finology Reserve, along with:

• Research-backed stock and mutual funds recommendations
• Capital safety approach for long-term wealth creation

But hey, let’s first examine how Finology Reserve helps you solve the 3 major problems we discussed:

Reason 1: You Don’t Allocate Assets Wisely

As per a study by The Financial Analysts Journal, 91.5% of your portfolio returns come from asset allocation, and less than 7% is attributable to stock selection. Let’s understand this with an illustration:

This shows that if a portfolio is generating 20% returns:

• 18.3% come from the right asset allocation
• 1.7% from selection and market timing

Yet, most investors fall for a familiar pattern: whenever surplus funds become available, they tend to chase the latest trending stocks or invest in low-yielding policies recommended by relatives.

The consequence: a portfolio that is either overly exposed to equity with little room for safety, or too secure without enough wealth-creating opportunities.

How Reserve Allocates Your Investments:

It provides you with a diversified investment plan with exposure to a mix of asset classes and sectors. This creates the right balance between high-growth assets and safe instruments backed with a research and safety-first approach.

Reason 2: You are Exposed to Avoidable Risks

If you are chasing the winners, you could be investing at the peak, and if you keep waiting for the right opportunity, you might miss the market rally. Either way, you may end up losing, trying to time for perfect entries and exits.

According to a study by the SmartAsset Financial Advisory Survey, 52% of Financial Advisors said that the worst investment mistake they see among clients is attempting to time the markets. Long-term investing is much more effective than trying to anticipate market changes.

For instance, if you had invested in the Nifty 50 for any 7-year period since 1999, you could’ve had:

• 0% chance of losses
• 82% chance of earning over 10% returns p.a.

According to SEBI, only 3% of Mutual Fund units remain invested for over 5 years, while 71% are redeemed within just 2 years. Meaning, only a few investors remain invested and most try to time the market with miscalculated exits.

What Reserve Prioritises For You:

Reserve prioritises capital safety over short-term, risky bets through market timing and advocates a disciplined approach to investing through its diversified recommendations for long-term wealth creation.

Reason 3: You Don’t Have an Investment Thesis

Most investors lack a clear investment thesis and rationale for their investments. As a result, their portfolios are filled with stocks that are only hot for the moment.

Without professional guidance, most investors choose flashy stocks over quality businesses. Consequently, when the stock falls, they become unsure whether to hold on in the hopes of recovery or liquidate and realise a loss.

On top of that, a major chunk of investors stick to their losses without strong fundamental reasoning waiting for a miraculous rebound. Know this: if a stock falls from 100 to 50, i.e., 50%, it has to rise 100% from 50 to reach its original value. This highlights the importance of having a confident and clear strategy to hold onto investments during losses.

Where Reserve Invests For Your Growth:

Reserve follows a strategic investment thesis providing research-backed recommendations on stocks, mutual funds, and other quality assets at fair valuations. This helps you build a strong portfolio to invest confidently across market conditions.

Conclusion

Managing your wealth on your own can be risky. One wrong move could set you back by years. It can easily become overwhelming, especially when you’re juggling other important priorities in life. But here’s the good news: you don’t have to do it alone.

According to a report by Business Standard, about 77% of respondents out of 1,000 wealthy individuals rely on professional wealth advisors, with UHNIs being the largest group seeking professional guidance.

You can do it too! All you need is the right guidance. Hire Finology Reserve’s Investment Advisor by filling out this enrollment form.

Reserve’s risk-averse approach prioritises capital safety, focusing on risk-adjusted returns through a research-backed and diversified investment plan designed for you. Grow your wealth sustainably without stressing over the rights and wrongs, and let us make the money work for you.

DISCLAIMER: Investment in securities market are subject to market risks. Read all the related documents carefully before investing. Registration granted by SEBI, membership of BASL (in case of IAs) and certification from NISM in no way guarantee the performance of the intermediary or provide any assurance of returns to investors