7 Signs that you are a Good Investor

Life is not simple. It does not merely revolve around the maxim “Eat, pray and love”. For most of us, the world around us comprises responsibilities and these are towards ourselves and our families. Each of us has been trained to believe since we were kids, that money is very important. It is not the end but it is the means through which you can see your responsibilities being fulfilled and dreams coming true.

When it comes to Money we have to talk about investments & investors. This post is written by Vikas Agarwal – he is Director in our company & takes care after Fund Sketch Service – Goal Focused Investment Planning

Signs that you are a Good Investor

Signs that you are a Good Investor

What would you rate yourself on a scale of 1-10 as an investor? We have given some indicators to help you assess your investment quotient –

  1. Assessment of your knowledge – How much do you know about investments? Are you someone comfortable dealing with shares, mutual funds and comparing products, and selecting the better ones for your financial needs? If you are someone who can manage your investments on your own and keep yourself updated in this topic, you do not need any assistance. But if you are someone overwhelmed by financial instruments, calculations of returns, and taxes and would be constantly paranoid about how an investment that you bought would do, then you should use the services of financial planners or investment advisers. If you are able to assess yourself realistically and take the necessary steps, you are a good investor.
  2. Be aware of the financial instruments and investments you own – Do you know how much you own? Do you have an idea of your financial net worth?  If you are aware of the range of investments be it fixed deposits, mutual funds, insurance policies that you have or have documented it and have access to it easily, you are doing a good job. You should review your investments once a while so that you can assess if they fit your financial plan.
  3. Make a financial Plan and Review it Regularly – You are a good investor if you have made a financial plan, execute the financial plan and review it regularly. Just making a financial plan is not enough.
  4. Plan of Action during an emergency – What will you do in case of an emergency which requires finance –
  • –      Withdraw from your PPF prematurely or take loan
  • –      Sell equity mutual funds
  • –      Use the money kept aside for emergencies as cash, in bank accounts and liquid mutual funds.
  • => If the last option is your answer, you are a smart investor. The other options are actions which will upset your financial plan.

5. Rebalancing Portfolio and Asset Allocation – When did you last have a look at your portfolio? Depending on your stage (single, married, retired), risk profile, and financial goals as a good investor you should

  • Check the asset allocation in your financial plan. It is important to have the right asset mix. For example, if you are in you are married and in your 40s, you should think about saving for retirement.
  • Review and rebalance your portfolio regularly
  • Have a mix of various types of assets so that returns are maximised and risk is minimized.

6. Invest not only in money – A good investor understands that money is not everything. He/She invests time and money in all aspects of life. You are a good investor if you Invest in increasing your knowledge in different aspects, spend quality time with family and loved ones, invest in learning and doing what you like. This will make sure that the quality of life is enriched. Must ReadGood is better than Perfect

7. Do you feel a uncertain about the investments that you made? – It is a sign of a good investor as it means you are thinking about it and will make an effort to be updated on what is happening to that investment. If for some reason, there are signs that the investment is not going to be worthwhile, you will try to take steps to mitigate losses. But if this brings lot of tension & if you have realised that most of the time you make wrong decisions – this is not a good sign.


If you are aware of your investment skills, you can take the necessary steps to achieve continuous financial growth. Hope the points mentioned above helps you in evaluating yourself as an investor. Do let us know what you think of yourself as an investor?


  1. The article was an eye opener.
    I have hardly any signs to suggest that I am a good investor.
    I will try to up date my knowledge.

    • Hi Shephali,

      Pleased that the article has inspired you to become a good investor. keep reading the for your benefit.

  2. Please explain in brief with examples how one should balance & with what % the sum received on opting for VRS.
    Also should one invest in gold bonds?

    • Vinayak,

      Much depends on your income need. In general a large part of your surplus should be invested for your future income requirement. You should analyze the sources of your income requirement which will give you an estimate of the amount to be allocated from the surplus you are going to receive. The asset classes will be selected based on when you need the income.
      Even then some portion of your corpus should be invested in equities for the long term. This is mainly to meet the shortfall which may arise from longevity risk i.e. when you live longer. This exposure can be 15-25% of your total surplus.

  3. Hi Vikas,

    Nice post! Keep going…

    I think, I am somewhere in the middle 🙂 soon, have to try to fix the gap.


  4. Sir,

    I am 57 years old and 3 years to go for retirement. I am drawing salary Rs.110000 per month and take home salary Rs.90000. I have two children and they are studying in colleges. Presently I am saving 40% my salary in SIP MF, RD and Deposits since 5 years.. My request is whether my portfolio is good performing or if my funds is not good performing kindly guide what to do and which funds can I invest through SIP for better future of my family and I. My portfolio as below

    UTI Leadership Equity – 1150
    UTI Opportunities Fund Growth – 2400
    UTI Top 100 2300
    UTI Dividend yield Fund G 2200
    UTI Banking Sector fund G 2100
    Reliance Gold saving Fund 2000
    Reliance Growth Fund Retail plan 1000
    SBI Emerging business fund 1500
    RD in State Bank of Mysore 12000
    RD in Post office 2000

    HDFC Insurance Quatrly 5000

    PPF post office yearly 100000

    If my portfolio is not good performing kindly suggest me to invest better performing funds.

    Thanking you

    • Dear Doreswamy
      I am not an expert, but all I can say is to consult a fee based financial Planner and get professional advise. I have done this 2 years back prior to my retirement and benefited a lot. There is no need for 8 mutual funds for a person aged 57.

  5. Dear sir, please review and add your comments for IDBI Federal Childsurance Savings Protection Insurance Plan.

  6. Hi Vikas,

    Excellene article! Going through them is always an opportunity to learn something.

    I have been following your advice and I could see myself more mature and infomred in terms of investment decision!

    Kudos to you and look forward to see more intersting articles in future.


  7. Hello Sir,

    I am very interested in investing but the problem is that I have not had a job for the past one year. However, I have been able to save a small sum from my previous job.
    How best should I invest this amount?

    Thank you.

  8. Hi
    thanks Hemant to help me in being a good investor,since i m a new investor still i have most of above signs.full credit to ur e-course and ur all article.
    only i need to maintain an emergency fund,which i m accumulating by liquid fund sip.

  9. HEMANT JI what u have quoted is very apt, some time im panic striken regarding my assets and goal planning.good article. REGARDS AND CHEERS.

  10. It is a good article. I have some of the signs u mentioned. But my biggest and worst
    Trait is procrastination. Since I am not the bread winner of the family I am getting away with it. Otherwise I could have had a more secure life. I urge all people like me (those who seek their husbands approval for everything and try to live idealistically) to make their own financial planning irrespective of their husbands
    Position and temperament because I believe there must be thousands of stupid housewives like me out there

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