CEO Speak

With the dynamic market conditions that we are experiencing in the first month of 2024, achieving long term financial goals requires a thoughtful, well informed, and diversified approach. Every year around this time, the Central Government of India presents the budget which is essentially an evaluation of its performance in the past year and the goal setting for the coming year – hence the budgetary outlays for the same.

For your personal investments also, this may be a good time to reflect on your financial goals.

Setting financial goals is the foundation upon which you can build a secure and prosperous future. No matter at what stage of your life and career you are in, prudent financial goal setting paves the path for aligned investment strategies.

SMART financial goal setting:

1. Define your financial Objectives: It can range from retirement, buying a home, paying off debts, children’s education, travel goals etc. Make your goals SMART – Specific, Measurable, Achievable, Relevant and Time-bound.
2. Prioritise your goals: This will help you in allocating your resources effectively. Prioritise your goals based on urgency and significance.
3. Assess your current financial situation: Understand and assess your current income, expenses, assets and liabilities. This will help you keep your goals realistic and achievable. Develop a budget that aligns with your financial goals.
4. Set aside an emergency fund: This is to cover unexpected expenses, typically 6 months of expense. Having a financial safety net can cushion you in case of emergency yet keep you on track towards your goals.
5. Explore investment opportunities: We recommend taking advise from a qualified financial advisor coupled with creating self-awareness Choose investment options as per your short term, medium term and long-term goals and your risk tolerance abilities.

Mutual Funds a potential SMART tool to meet your financial goals.

Diversification – Mutual funds by the way they are designed offer an inherent diversification into multiple asset classes. This mitigates the risk of retail investors investing into single stocks or bonds.

Investment option to suit every financial goals: Short term, medium term and long term goals can be achieved through different kinds of mutual funds schemes. Liquid funds provide options for parking money for very short term. Equity funds can be typically suitable for long term wealth generation. Debt oriented funds can be suitable for investors who don’t want to take much risk. Balanced funds can provide a well-rounded approach for those looking for a combination of long term growth and income.

Professional management: The experienced professionals who manage the funds conduct research, analysis and make informed decisions on behalf of the investor. This is a critical reason for choosing mutual funds over investing directly in stocks or bonds in case one does not have the necessary expertise.

Liquidity: Mutual funds are liquid and easily accessible. With the advent of digitisation, ease of transactions has benefitted all investors.

Tax efficiency: ELSS (Equity linked saving scheme) provide benefits under Section 80C of the Income Tax Act. For long term investments mutual funds can serve as a tax efficient financial instrument.

SIP (Systematic investment plans) is a tool to invest into mutual funds and inculcates the habit of regular and disciplined savings and investments. We encourage young investors to start early through the SIP route to help them in long term wealth creation. Like the government of the country does an annual review of its financial health and budgetary outlays, all investors also must do the same once a year. The growing AUM of the Indian mutual fund industry signifies that mutual funds have emerged as a popular investment vehicle that can offer investors the opportunity to build wealth and meet their financial goals in long run.

Review your financial goals, investments, and portfolio.

Happy investing.

Disclaimer: This document has been prepared by HSBC Asset Management (India) Private Limited (HSBC) for information purposes only and should not be construed as i) an offer or recommendation to buy or sell securities, commodities, currencies or other investments referred to herein; or ii) an offer to sell or a solicitation or an offer for purchase of any of the funds of HSBC Mutual Fund; or iii) an investment research or investment advice. It does not have regard to specific investment objectives, financial situation and the particular needs of any specific person who may receive this document. Investors should seek personal and independent advice regarding the appropriateness of investing in any of the funds, securities, other investment or investment strategies that may have been discussed or referred herein and should understand that the views regarding future prospects may or may not be realized. In no event shall HSBC Mutual Fund/HSBC Asset management (India) Private Limited and / or its affiliates or any of their directors, trustees, officers and employees be liable for any direct, indirect, special, incidental or consequential damages arising out of the use of information / opinion herein. This document is intended only for those who access it from within India and approved for distribution in Indian jurisdiction only. Distribution of this document to anyone (including investors, prospective investors or distributors) who are located outside India or foreign nationals residing in India, is strictly prohibited. Neither this document nor the units of HSBC Mutual Fund have been registered under Securities law/Regulations in any foreign jurisdiction. The distribution of this document in certain jurisdictions may be unlawful or restricted or totally prohibited and accordingly, persons who come into possession of this document are required to inform themselves about, and to observe, any such restrictions. If any person chooses to access this document from a jurisdiction other than India, then such person do so at his/her own risk and HSBC and its group companies will not be liable for any breach of local law or regulation that such person commits as a result of doing so.

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