Question

Discussing the latest hot stock tip around the watercooler is not a recommended element of astute investment management. It may be fun but it’s risky. Discuss the benefits of a comprehensive investment plan and where that hot tip fits in your investment plan.

Answer 1

Never run behind the hot tip that we receive from anyone since it may be a risky affair. Always stick to the concrete imvestment plan which is designed by the professionals or the investment advisors.

There are numerous benefits out of comprehensive investment plans.

1. Regular income.

Some people tend to receive regular income or dividends from investment opportunities. For those, a detailed study of investment plan is required.

2. Maintain financial security.

If investors have a concrete or comprehensive investment plan in their basket, then it is obvious that they will have a financial security with regards to investment aspect.

3. Maintain long term targets

Some investors have a target or an aim of some events where they want money with an efficient returns on it. For them, comprehensive investment plan is the must.

4. May reduce taxation element

Some long term investment may have a negligible amount of tax at the time of redemption. Hence, for those who buy investments for short term purpose, may land up paying hefty taxes.

5. Maximum returns.

Always it is believed that long term investments fetch higher returns. So keeping it for a longer term will suffice the need for long term goals.