What is investment Planning?


The act of deciding on one's financial goals and developing a plan for achieving them is known as investment planning. Investment planning is the foundation of financial planning. Investment planning begins with determining goals and objectives. Then, we must strike a balance between those goals and the available financial resources. Today, there are many options for investing, with cash, stocks, bonds, and real estate is the most well-liked. Based on the funds we have available. we can invest in these vehicles to help us attain our goals and objectives.

Benefits of Investment Planning

The importance and benefits of investment planning are stated below:

·         Family Security: For your family's security, investing wisely is essential. Even if the working member were to suffer a loss, the family's investment will guarantee the other members' financial stability.

·         Efficiently manage income: To successfully handle one's income and spending, one can employ an investing strategy. By managing income, one may manage other costs, tax liabilities, etc.

·         Financial Understanding: Planning your investments might help you better comprehend your financial status. Financial knowledge makes it simple for someone to assess investments or retirement plans.

·         Savings: Investments: should be made in highly liquid investment instruments. In an emergency, money can be easily withdrawn from those investments.

·         Standard of Living: The savings generated by the investment are quite helpful in trying times. For instance, the standard of living is dramatically affected when the family's primary provider passes away. The investment made by the worker at that moment provides a significant source of income for the family.

Objectives of Investment Planning

·         Safety: Also, one should put money into secure investment instruments. Money market investments are safer than bond market investments.

·         Income: We must invest in higher-risk investment vehicles in order to earn a larger income in order to benefit from them. To benefit from return maximization, investors must do a thorough analysis, assess their risk-return ratio, and invest appropriately in the right asset classes. Thus, careful investment planning is crucial.

·         Growth of Capital: The difference between a capital gain and a return is that a capital gain can only be realized when the security is sold for more money than it cost to buy it in the first place. Capital loss results from selling at a loss. Thus, investors who desire capital gains should make longer-term investments in securities.

·         Tax Minimization: As part of his investing strategy, an investor may choose to make those investments in order to minimize taxes. A wealthy businessman, for instance, could desire to look for investments that have favorable tax income in order to lower taxes.

·         Liquidity: Many investments are liquid, meaning that it is simple to turn them into cash. Yet giving up a certain amount of revenue is necessary to reach this level of liquidity.

How to create a solid investment plan?

Before investing in any kind of investment instrument, a solid investment strategy is required. If we don't plan, all of our investments will wind up in a mess. Planning is an important step to take before investing.

The investment planning steps are as follows:



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