Financial goals: are you a savvy investor?

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Financial planning and goal-oriented investing have been the most talked about topics since time immemorial, albeit in a muted way. While these are the fundamental topics of finance, they are rarely discussed in terms of action, in part because of the “go with the flow” thought process. India is currently experiencing a wave of stocks that started in 2014 alongside the emergence of a bull market. Despite the pandemic, equity participation has soared – surprisingly due to the same factor.

According to the Standard & Poor’s Global Financial Literacy Survey, only 24% of Indians are financially literate. This means that 76% of our Indian population does not even know basic financial concepts.

Assuming that half of people with financial knowledge make planned investments – only 12% of the population – the remaining 88% are unaware or have no plan for their investment strategy.

Financial wealth in India grew 11% per year to $3.4 trillion between 2015 and 2020 and is expected to grow 10% per year to $5.5 trillion by 2025, according to a new report from Boston Consulting Group (BCG). Funny, isn’t it? For a country that has now amassed a formidable investor base and equally formidable wealth – the subject of goal-oriented investing has yet to make its presence felt.

In January, India’s total dematerialization accounts stood at 51.5 million, up from 40.8 million at the end of FY20 and 35.9 million in FY19. the investor base and participation increase, thoughts about the goals to be achieved are also formed simultaneously. After all, it is the inherent demand and aspirations of investors that drive them to line up and financialize their assets.

At the same time, the need for goal-oriented investments becomes relevant. Today’s investor needs capital appreciation for a purpose – be it a vehicle, a home, an expensive vacation, a wedding, retirement, children’s needs, sabbaticals, etc. . The YOLO phenomenon has really begun. This mindset creates an automatic need for specific requirements from investors big and small.

Ultimately, today’s investors will gain experience as financial markets evolve. Along with this, their goals will also change over time. So will aspirations and priorities. It is at this stage that simple investment advice will not suffice. They will need clear asset allocation guidance, a deployment strategy and, most importantly, the ability to choose the goals they want to achieve with the capital invested. Gone are the days of asking the elderly uncle for advice on what stocks to buy. Today’s investor craves time and attention for their portfolio, tailored to their personal goals.

Human advisers from time immemorial have played and will continue to play a role. What if the right data and the right platform were more than that? Finally, investments should be purely data-driven, while the investor is more focused on his life. Technology can step in to help individuals design portfolios, reduce costs, optimize returns, reallocate the baseline, and filter good opportunities from bad ones. Accessibility and quick decision-making is the inherent need of the hour, for the convenience-hungry, time-constrained consumer. Regular platform interaction that creates actionable insights and on-demand insights is a magic recipe for a new era financial advisory platform. If this is the sweet-spot for the perfect investment plan, then we’re ready for a spin.

This leads to a few key points:

  1. The creation of a financial plan takes precedence over the ordinary investment
  2. Identification of personal goals and objectives to achieve with wealth in hand today
  3. The ability to switch goals at will and receive unhindered support from the platform
  4. Investors need to find solutions that not only solve their money, but also a solution that communicates with you like a human advisor
  5. Application to create a one-stop-shop for investors, where they can dump all financial data and allow the platform to analyze meaningfully.

(By Yash Poddar, Product and Marketing Strategist at GoalTeller)

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