Everyone who invests aspires to become richer, smarter, and successful. But that does not mean that you blindly follow successful investors. Blindly copying the portfolio of a successful investor is not advisable for many reasons.
This ArthaYantra post helps you understand the importance of creating a personalized portfolio when it comes to investments. Here are main reasons that discourage simply following top investors.
1. No Guarantee on Performance
Just because an ace investor has invested in a particular mutual fund or stock, there is no guarantee that it performs well. Even the big bulls are mortals capable of committing mistakes. Remember that in every great investor is a speculative trader.
2. Cannot Assess the Time Span
Another drawback is that you never know when he would withdraw his investments. He doesn’t leave a clue whether the investment is long-term or short-term. In short, you would not know the investment time frame. Moreover, no one can speculate where this smart investor will be investing next? So it’s a risky game altogether.
3. Investments May be Nothing to Him
Investments made by him may not be that big an amount for him. Some investments may be too trivial for the billionaire investor. One bad investment may not affect his overall portfolio. But, it may not be the case with you. How far can you sustain if the investment turns a failure?
However, all these factors should not discourage you from tracking what the other investors do. Simply ensure that you do not blindly follow the ace investors. Rather create your own profile and go accordingly.
Each investment is based on one’s personal goals. Copying other’s performing portfolios will not help as your needs are different from theirs. After all, one size doesn’t fit all!
In conclusion, create your own investment portfolio based on the investment opportunities within your risk profile. Planning and financial goal setting should be the priority, besides risk analysis.
Understand where you stand today and where you intend to reach in the future. Approach a financial advisory like ArthaYantra that offers unbiased scientific advice on your goals, risk, taxes and investments. Get a holistic financial planning done, to secure your future.