Financial Planning

Portfolio Alignment based on goals timelines: 

It is always advisable that the investment portfolio stays aligned with the financial goals. A goal-linked financial plan with proper asset allocation carries immense potential to render peace of mind, even if the markets are highly turbulent. If one is aware that the financial goals still have sufficient time to go, the short-term market volatility may not impact the overall financial plan. Further, defining the investment horizon upfront can also help to select the suitable schemes matching the desired time horizon. 

Rebalancing higher returns to safer schemes: 

As one nears the financial goals, it is important that the portfolio is de-risked to protect the existing returns and to limit the downside. With lesser time in hand, it may be difficult for the investments to bounce back if the markets get into correction mode. As such, one may need to dilute a larger chunk of investments to realize that goal or stay 

Need-based withdrawal, not market-based: 

This is another important aspect of prudent financial planning. If the markets are doing well, one is often enticed to continue to stay invested to ride the future market rallies. However, it is always better to limit the redemptions as per the specific needs, instead of being based on the market trends. One should not ride the profit until the deadline and safeguard the goal amount well before the deadline if the financial goal has already been achieved. A smooth investment journey is not only about generating the returns when the markets are good, but also protecting the downside when the markets are bad.