Makar Sankranti- Teaching Mutual Fund Investment Lessons
After celebrating New Year now comes the first festival of the year 2017, to be celebrated on January 14, Makar Sankranti or the Kite Flying Festival. It is one of the most favourite festivals for Indians on which everyone gets in the festive mood to fly kites with zeal and high spirits. You must be awaiting for Makar Sankranti, and now when the day has arrived, you must be busy in arranging everything you would need to get started. Apart from flying a kite, have you ever wondered you could learn lessons for making mutual fund investments from this festival? Yes, you heard it right! We are talking about the investment lessons which this Kite Flying festival teaches us.
Defining Makar Sankranti
Makar Sankranti or Pongal, or Uttarayan or Poush Sankranti as it is referred to as in various places in the Indian states, is basically the day when the Sun leaves the Tropic of Cancer to reach the Tropic of Capricorn(which is called Makar in India). It is a festive time for the farmers because it ends the biting winter season and announces the start of the new harvesting season. Therefore, this is the reason it is also considered and celebrated as the Thanksgiving day. So let us now evaluate what does Makar Sankranti provide to the investors for making better investments in the mutual funds.
Steps in Kite Flying that Teach Mutual Fund Investors
Here are the steps which are involved in the process of Kite Flying on Makar Sankranti:
Step 1: Choosing Kites & String- Selecting & Shortlisting Mutual Funds
First of all, everyone chooses the best kite and string from the market and buy the same. As per the features of the kites and strings, one selects the one which is best suited to their requirements. In the case of investing in mutual funds as well, the first step must be selecting the funds out of the thousand alternatives available and shortlist them for final selection. The funds must be selected on the basis of their nature, category and other traits which would be helpful for them to fulfil their needs.
Step 2: Preparations for Flying Kite- Screening the Shortlisted Funds
The second step in Makar Sankranti is making proper preparation to celebrate the festival. It involves tying the knot to the kite, selecting the place for flying, tying string in the Charakhi, and so on. These steps are essential to make a successful start and end of the kite flying celebration. On the other side in case of investment as well, you need to make arrangement to take the final investment decision in the best funds. Out of the shortlisted mutual fund plans, you need to select the funds for our portfolio. This final selection of the schemes will be responsible for growth and fall of your portfolio.
Step 3: Flying Kite- Designing Portfolio & Making Investments
The third and the most challenging step in Kite Flying process is the actual flying of the kites in the sky. You need to consider the various factors for this which involve the flow of wind to be the most important. You need to make the best strategy to fly a kite in the best direction so that it does not fall. Similarly, in the case of investment in mutual funds, one needs to design the portfolio by selecting the best schemes. You need to put your money in those schemes to start your investments for achieving your financial goals in the future.
Step 4: Maintaining Balance of Kite- Balancing Portfolio & Investments
Once the kite reaches some height, one balances the same to make it stable in the sky and let it keep flying. One follows various strategies and techniques to maintain the balance so that the kite does not fall. For investments, investors too need to keep a proper balance between the schemes so that the risk of the investment could be minimised. In mutual funds, diversification helps in maintaining such balance. By diversifying the funds in different assets, one can balance the portfolio to provide it stability for growing money.
Step 5: Tackle Kite’s Fall: Tracking Funds & Take Required Action
Last but not the least, the final step is tackling the kite’s fall. Yes, in certain cases even after maintaining proper balance the kite falls off. At that time, one needs to tackle the kite and make proper control so that the kite could achieve stability again. In the case of investments, on the other hand, investors are also required keep a proper watch on their portfolio and take the requisite action immediately so that the investment values does not get affected.
Although kite flying festival brings a lot of fun and celebrations on this auspicious occasion, the lessons it teaches are no doubt very essential for every investor. You too must implement these teachings in your investments to gain success and achieve your financial goals.
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