Budget 101: How to save for periodic expenses: the sinking fund »

Investor behaviour: control what is possible

Posted on 06 Mar 2021
Author: Sayan Sircar

Tags: Behaviour

1 min read

While investing, focus on those important things that you can control.

It is interesting to observe investor behaviour in the field of personal finance. People generally are focused on more minor, mainly operational aspects of investing. They give less attention to strategic actions that have more impact on achieving their investment goals.

One way of classifying investor behaviour is looking at things that we can control vs those crucial things that matter

CLICK TO TWEET

Here is the view

Control what is possible

The diagram essentially means that there are important things and those we can control:

Setting goals and having the proper asset allocation
Automated investing based on an investment plan
Regular review and rebalancing
Choosing low-cost index funds over high-cost active funds
Having an emergency fund
Using a sinking fund for regular but large expenses like insurance payments

Contrast this with things that are easy to worry about but may not be as important:

Having unrealistic return expectations leading to either saving too little or taking unnecessary risks: handle this via asset allocation and review and choose the right assets for a goal
Timing the market or waiting for the right time to enter / exit: stick to your plan and rebalance in case asset weights deviate from the target
Looking for the best fund or stocks: invest instead in diversified funds that have low costs like this
Investing solely to save tax: evaluate if the investment is suitable for your goals
and many more

What's next? You can join our WhatsApp community

You can stay updated on our latest content and learn about our webinars. Our community is fully private so that no one, other than the admin, can see your name or number. Also, we will not spam you.

Discover an article from the archives

Worked out case studies for goal-based investing

Case study: how this double income recently married family can perform DIY goal-based investment planning

This article shows how a young just-married couple can invest for future goals using the Arthgyaan goal-based investing tool.
Case Study: How should couples in their 40s with a new baby plan their financial future?

Did you welcome a bundle of joy in your 40s? This article will discuss ways of planning the child’s (and your’s financial future)
Case study: how this double income single kid family can perform DIY goal-based investment planning

This article shows how a very typical salaried couple with one child can invest for future goals using the Arthgyaan goal-based investing tool.

Previous and next articles:

<p>Save money monthly for significant known expenses via a sinking fund.</p>

Budgeting

Budget 101: How to save for periodic expenses: the sinking fund

Save money monthly for significant known expenses via a sinking fund.

Published: 8 March 2021

4 MIN READ

Latest articles:

<p>This article helps you decide when to prepay your home loan - at the beginning, middle or end of the total loan period.</p>

House Purchase

Should you prepay your home loan at the beginning or at the end of the tenure?

This article helps you decide when to prepay your home loan - at the beginning, middle or end of the total loan period.

Published: 19 March 2023

2 MIN READ

<p>This article helps you estimate the returns from your investments to help you decide how much you need to invest.</p>

Portfolio Construction

How much returns should you estimate for your goals?

This article helps you estimate the returns from your investments to help you decide how much you need to invest.

Published: 15 March 2023

4 MIN READ

Topics you will like:

Asset Allocation (19) Basics (8) Behaviour (10) Budgeting (10) Calculator (14) Case Study (3) Children (11) Choosing Investments (31) FAQ (4) FIRE (11) Gold (6) Health Insurance (4) House Purchase (14) Insurance (14) International Investing (8) Life Stages (2) Loans (9) Market Movements (10) Mutual Funds (22) NPS (5) NRI (5) News (6) Pension (6) Portfolio Construction (42) Portfolio Review (24) Real Estate (4) Retirement (33) Review (11) Risk (6) Safe Withdrawal Rate (5) Set Goals (26) Step by step (9) Tax (19)

Next steps:

1. Email me with any questions.

2. Use our goal-based investing template to prepare a financial plan for yourself
OR
use this quick and fast online calculator to find out the SIP amount and asset allocation for your goals.

Don't forget to share this article on WhatsApp or Twitter or post this to Facebook.

Discuss this post with us via Facebook or get regular bite-sized updates on Twitter.