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Investment Planning: What Is It & How To Do It Better?

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July 25, 2022


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Investment Planning: What Is It & How To Do It Better?

What could be the best investment plan for you? Is it something that helps you get a planned amount of returns? Or is it something that enables you to meet your financial goals? Well, it can mean different things to different people. 

Moreover, there is no single plan that can match each individual's financial goals and that can be classified as the best investment plan in India. 

Are you wondering where to start your investment planning journey and one that works specifically for you? Let’s first understand what investment planning looks like. 

What is Investment Planning?

Investment planning is the process of aligning your investments to your goals and your risk profile. By analysing your risk profile, you can understand your true potential in investing. 

Here’s how you can arrive at your true potential in investing:

You look for Strengths, Weaknesses, Opportunities and Threats (SWOT):

  • In investment planning, your strengths are your income level, job profile and how early you have started investing.
  • Your weaknesses can be your liabilities and the number of dependents in the family.
  • You can find opportunities in terms of reducing your expenses to the minimum. 
  • Finally, your investments may face threats from uncertainties like inflation, job loss, theft and medical emergencies. 

This SWOT analysis of your investment potential is the barometer for your risk appetite. 

List Your SMART Goals

Investment planning is all about you and your goals. You invest your money to fulfil your goals, dreams and aspirations for the future. While at it, you should also ensure that your goals are SMART (Specific, Measurable, Achievable, Relevant and Time-bound). Otherwise, your plans may be vague or wishes that will be difficult to achieve.

Another way to reach your goals quickly is to classify your goals as short-term, medium-term and long-term. 

  • Short-term goals have a time horizon of up to three years. Examples of short-term goals are home renovation, buying a two-wheeler and jewellery.
  • Medium-term goals have a horizon of three to five years. Medium-term goals may be goals like going on an international vacation with family or buying a new car
  • Long-term goals are those for which you have five years and more. They may be your child’s higher education, retirement corpus, or buying a second home

Once you have listed down these goals, make sure you are calculating their actual value. Your goal's real value is its current value plus inflation. 

Cover Potential Medical Threats With Insurance

By purchasing adequate insurance cover, you can protect your finances from the potential havoc some liabilities can wreak. 

Here are a few popular insurance products to consider:

  • Term life insurance: Term life insurance covers your dependent family members in the event of an unfortunate incident, such as death, caused by lifestyle diseases and complications.
  • Health insurance: Health insurance covers your hospital bills and daycare procedures and offers cashless hospitalisations at network hospitals. It provides financial protection for you and your family in the face of rising medical costs and uncertainties. Looking to get the right health insurance plan based on how much you earn? Read this blog to know more.
  • Critical illness cover: Critical illness cover complements your health insurance, providing a lump sum for diagnosed acute illnesses like cancer or stroke. It adds to your financial protection, covering expenses not included in basic health insurance, such as income loss.

Know Your Risk Appetite

Aligning your risk appetite with your investment planning is crucial. It measures the suitable level of risk for you. Considering growth prospects and risks is essential when evaluating big or small investment planning avenues, as all investments are subject to market risks. 

Understand Markets

Markets rarely follow a straight and steady growth pattern. They tend to be erratic, unpredictable and volatile in their movements in the short term. 

This is because the emotions and outlook of investors drive markets. Those, in turn, are operated by uncertainties like local politics, geopolitics, natural calamities, weather, population demographics, economic outlook, exchange rates, wars, and inflation. It’s better to be prepared to deal with the risk of short to medium-term loss that is caused due to market volatility.

How to Measure Risk Appetite

Your risk appetite is a measure of how much risk you can withstand. Ask yourself these questions: 

  • Are you prepared to deal with short to medium-term risk while pursuing long-term gain from your investments? 
  • How will you react if the value of your portfolio goes down by 30% within a short period? (This can happen in times of significant turmoil like the recent COVID-19 pandemic or the global financial crisis of 2008)
  • How will such uncertainties impact your goal-based investments?

The answers to these questions will give you a sense of your risk appetite for your goals. 

Match Investments to Goals and Risk Profile

If you tend to gravitate towards the risk-averse side, you can have more debt and gold mutual funds in your portfolio. You can even consider index funds that are less volatile if you have a medium-term goal. 

If you have a high-risk appetite and are planning long-term financial goals, you may allocate more to equity-based mutual funds that are more volatile.

Do Your Research

Be confident in your investment decisions, as they are ultimately for you. You need to put in the time and effort required to research the pros and cons of every investment decision you make. Start your investment plan by choosing the right mutual fund for your goals. Select the mutual fund of your choice using the Fi Money app, set your SIP amount and date and start your journey. Mutual Fund investments on Fi are commission-free. With its intuitive user interface, suited for novice & seasoned investors, you can select from over 900 direct Mutual Funds. Plus, Fi's 100% secure as it functions under the guidance of epiFi Wealth, a SEBI-registered investment advisor. To help simplify the steps involved, you can invest daily, weekly, or monthly via automatic payments or SIPs — created with one screen tap. Moreover, Fi offers 100% flexibility with zero penalties for missed payments.

Assess The Progress

Once a quarter is an excellent period to assess your investments. Check whether your investment planning is on track to meet your goals. Also, check that they are aligned with your risk profile. If they are not, you may tweak and rebalance them to get them on track after the assessment.  


In conclusion, the best investment plan in India varies from person to person, depending on their financial goals and risk profile. Investment planning involves understanding your strengths, weaknesses, opportunities, and threats, as well as listing your SMART goals. It is important to cover potential medical threats with insurance and align your risk appetite with your investment strategy. Understanding market dynamics and conducting thorough research is crucial for making informed investment decisions. Regularly assessing the progress of your investments and making necessary adjustments ensures that your investment plan stays on track.

Plan Your Investments Via Fi 

Users can find several investment options on the Fi app. Be it short-term or long-term — it's easy to invest with a simple swipe of your phone's screen. Fi also offers a Peer-to-Peer investment feature called Jump! Jump can help you earn up to 9% p.a on your investment. But if you want to save up for a short-term goal & earn interest on it, select our super-flexible Smart Deposit. If you're looking for higher/stable returns, opt for a Fixed Deposit.

Frequently Asked Questions

1. What is investment planning?

Investment planning matches your financial goals to suitable investments based on your goal horizon and risk appetite. It is a continuous process involving making financial goals, assigning investments, regularly investing in allocated assets, conducting periodic reviews and rebalancing. The Fi money app offers research material and insights to help you make effective investment plans. 

2. What are the four types of investments?

Here are the four basic types of investments: Equities, representing ownership in listed companies and can be volatile; Debt, which includes bonds with fixed interest rates from loans to companies or governments; Commodities, such as gold and crude oil, which are less volatile than equities; and Mutual Funds, pooling investors' money to invest in curated assets from various classes, including Fund of Funds (FoF).

3. How do I make an investment plan?

Investment planning is a comprehensive approach where you learn about yourself and your goals. Follow these steps to make a sound investment plan:

  1. Know your risk appetite 
  2. List your goals
  3. Categorise your goals into short-term, medium-term and long-term
  4. Make sure you are managing emergencies through adequate insurance
  5. Seek professional financial advice
  6. Start investing 
  7. Track your investments from time to time


Investment and securities are subject to market risks. Please read all the related documents carefully before investing. The contents of this article are for informational purposes only, and not to be taken as a recommendation to buy or sell securities, mutual funds, or any other financial products.
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