Bye Bye 2017: Here are 4 resolutions investors can make for 2018 to generate wealth

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By Anil Rego

On the back of 30 percent plus equity returns in 2017, investors have high expectations from 2018. As we step into a New Year, it is time for introspection and resolve.

It is hard to predict what will happen to market-linked investments on a 12-month basis, but what all investors can do is to be level-headed and pragmatic in their approach.

Here are 4 important resolutions that will help one to get more out of their investments:

Save and invest first, spend next:

Saving is the cornerstone of investment. Yet, the focus on investment often takes the sheen off savings. Since investing requires capital, you have to save.

Investors should target 20-25 percent savings every month, and invest the money as per your risk profile and asset allocation strategy. Do not try to take loans to invest.

Also, avoid using leverage to gain big on investments. The simplest way is to save, and then spend.

Retain expenses but use incremental income towards investment:

A New Year often brings good news in the form of salary hikes and bonuses in some cases. But, the average salaried employee often fritters away the incremental income.

As a result, the investment capacity remains the same. To avoid this in 2018, retain the expenses at the same level as in 2017.

This will mean that you will be left with the higher income, which should be used to invest. A mere 10 percent annual rise in a regular monthly investment over ten years can boost by a significant amount.

Ascertain investment risk:

Investing entails a certain amount of risk. Investment risk can be of various types like interest rate risk, business/security risk, credit risk, taxability risk, inflationary risk, liquidity risk, currency risk and exchange risk.

Investors usually look at historical returns while deciding to invest. For 2018, try to find out the investment risk associated with the asset class, be it debt or equity, so that you understand the risk-reward pay off much better.

For instance, a high-risk junk bond that pays 2 percent more compared to a government bond may look attractive, but is it worthwhile to accept principal erosion risk for 2 percent more?

Create investment portfolio based on your goals:

Random amounts like Rs 1 crore or Rs 5 crore look big, but humans are driven more by emotions than just numbers.

While it is good to imagine yourself a crorepati in 15 years, if the Rs 1 crore is your retirement corpus then suddenly the goal becomes sacrosanct.

When you start sewing up investments in 2018, always create the investment portfolio depending on simple and achievable goals like son’s higher education, second car, foreign trip, daughter’s marriage, my retirement etc.

Defining a goal helps investors in understanding the amount of time and the amount of risk they can take to reach the destination.

Disclaimer: The author is CEO and Founder, Right Horizons. The views and investment tips expressed by investment expert on are his own and not that of the website or its management. advises users to check with certified experts before taking any investment decisions.

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