Every dream needs a plan

‘Smart Investing’ is a way to channel savings in the most beneficial direction.

KARACHI: “People don’t plan to fail – they fail to plan.”

Dreams are endless. Starting a business, dream of a new car, providing excellent education for kids, globe-trotting or buying a home, our dreams develop as we move further in life but whether they are achieved or not, depends on whether we plan well for it.

We all want the best in life, for ourselves and our family, which is why it’s not just savings that’s important but also channelling those savings in the most beneficial direction and a sure way of doing so is through ‘Smart Investing’.

Various companies offer investment opportunities and instruments, and all of them blow the trumpet about the stock market being the best option out of them all if you are looking for high returns and have a long-term investment horizon. Most people think that investing in stocks is only for the stock market savvy, finance experts but that’s where your trusted fund manager comes into play and as an expert does it for you.

Experts suggest that the best way of managing the risk of investing in stock market is by periodically deploying a specified portion of your assets in equities, rather than making a single investment at a particular point in time. The idea hence is that if you enter the stock market at various points, you benefit more on the average.

Smart investment plans allow you to choose your investment stance based on your risk profile ie you can choose to invest aggressively if your risk profile is high, conversely if your tolerance to risk is low or moderate you want to test the waters at both ends of the spectrum.

But what do you do with the idle sum of money you have while you wait during the intervals?

You keep it in a money market fund, mainly comprising government securities.

This may be a point when you might think that you don’t have the nose to smell the market opportunities or may be hesitant to assume the risk of 100% investment in stock market, which is why you have fund managers and plans that will accomplish this task for you.

So on one hand you are benefiting from returns in government securities while on the other hand you regularly get to invest pre-decided amounts in stocks at the intervals you choose or let your fund manager choose.

Another plus point of such plans is that when you feel the stock market may decline, you can, with just a phone call or a click, immediately transfer your money back from stocks into money market funds.

These are exactly the kind of plans that you need to change your dreams into reality.

The writer is an investments and smart savings expert at UBL Funds

Published in The Express Tribune, July 15^th, 2013.

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