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

2 mins read
📢Join 3400+ readers on WhatsApp and get new post notifications!

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 the Arthgyaan 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.

For resident Indians 🇮🇳:

For NRIs 🇺🇸🇬🇧🇪🇺🇦🇺🇦🇪🇸🇬:

Share on WhatsApp:

To understand how this article can help you:

If you have a comment or question about this article

The following button will open a form with the link of this page populated for context:

If you liked this article, please leave us a rating

The following button will take you to Trustpilot:

Discover an article from the archives

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 gives you the mathematical support regarding the financial and life-stage reasons to consider accelerating loan repayment, from income stability concerns to freeing up funds for retirement or children’s education.</p>

House Purchase Loans Mutual Funds

Pay Off Your Home Loan Faster: How Extra EMI Payments Save Time and Money

This article gives you the mathematical support regarding the financial and life-stage reasons to consider accelerating loan repayment, from income stability concerns to freeing up funds for retirement or children’s education.

Published: 1 December 2024

3 MIN READ

<p>This article explores how your CTC translates to in-hand salary, maximum loan eligibility, and the right down payment for your dream house.</p>

House Purchase

How Much CTC Do You Need to Buy a ₹1 Crore Home in India?

This article explores how your CTC translates to in-hand salary, maximum loan eligibility, and the right down payment for your dream house.

Published: 27 November 2024

3 MIN READ

Topics you will like:

Next steps:

1. Email me with any questions.

2. Use our goal-based investing template to prepare a financial plan for yourself.

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.

Arthgyaan

Supporting everyone's personal finance journey