Know the risks in your investment

Risks in investment are of two types- namely market risk ( also called systematic risk) and company - specific risk ( called unsystematic risk ). Market risk is induces by market forces, which are external to the company.
Company specific risks are induced by factors internal to the company.
In short, systematic risk affects all businesses in that particular sector while company specific risk affects only the company in question.
Market risk are too difficult to predict but it can be possible to diversify the company specific risk and allocate the investment across various other companies. Allocations will help reduce the risk that parking all the investment in one company or a small set of companies induces. This is to ensure that prices of all the companies do not move up or down at the same time. It can be done by only one way and that's called "Correlation".

Cut the flab to stay financially fit this year

Today there is just too much of financial flotsam that just a passbook and a notebook is not enough to keep check on your investments. Its time to clean up the financial wardrobe
Let's see how
1. Its wise to to not to have more than two bank accounts. Choose bank with a wider reach so that you don't have to change one when you Re relocating or changing job.
2. Asset Allocation:
# review portfolio every year
# check under performers and schemes with high expenses and low returns
# don't go for more than 8-10 funds
# avoid new funds
3. Keep only two cards.
# go for EMI options to pay delayed outstanding
# close the card with a high interest rates
4. Do not invest in more than three or four policies . ideally go for policies that can vè closed after certain no of years.
5. Use you hindsight while investing in stock market. Don't follow the tide. It takes a lot of time for money to grow even in the markets.
6. The Loan portion ideally should not exceed 40% of your monthly pay.
Lastly Play wise for a Happy New Year :)