Tag Archive : financial planning process

Mistakes To Avoid in Financial Planning

10 Mistakes To Avoid In Financial Planning

Which Are The Common Mistakes People Do In Financial Planning?


Many of us do not work on financial plan and if we do, we make some obvious mistakes which impacts the plan. This article talks about the 10 mistakes to avoid in financial planning, in order to create a great financial plan.

Why It is Important To Be Aware of our Financial Mistakes?

  • When it comes to money, everyone makes mistakes. However, the number and extent of these mistakes decide our success.
  • A good financial plan can reduce the occurrence of these mistakes significantly. So creating a financial plan requires good care and awareness of what mistakes one can make. So, in this article we will talk about the mistakes to avoid in financial planning
  • Financial Planning is very important, but regrettably often overlooked by most investors. A proper financial plan consists of a comprehensive evaluation of your current and future, financial state.
  • At the most basic, your financial plan should use current known variables to predict future income, asset values and ensure your money outlives you. Many of us do not work on financial plan, if we do, we make some obvious mistakes which impacts the plan.

Here are the 10 common mistakes to avoid in financial planning :

10 Mistakes To Avoid In Financial Planning
10 Mistakes To Avoid In Financial Planning

1. Not Starting Early :

  • Many individuals start planning only when they reach their 40’s, as it finally dawns on them that they are not too far from retiring. At this stage, since they have little time to create a corpus that should take care of them for at least 2 decades of retirement plus their kids education, etc. and therefore they need to make big investments regularly. This is usually difficult, due to the financial responsibilities people generally have in their 40s, like paying off a home loan, current education expenses, etc.
  • Remember, the earlier you start planning, the more time you give to your investments to grow. Consequentially, the more corpus you would be able to accumulate.
  • For Example: For a 35-year old, Rs. 1.5 crores retirement corpus would require an SIP of Rs. 8,000 per month with annual returns of 12% on the investment, till the age of 60 years, whereas for a 25 years old planning to retire at 60 years, for Rs. 1.5 crores corpus would require an SIP of just Rs. 2,300 per month in SIP, with 12% annual return. Therefore, starting early isn’t a choice, it’s a must. We have explained this better in our article – ‘Cost of Delay in Investing’.

2. Ignoring Inflation :

  • We have heard many people saying statements such as ‘If I will have Rs. 1 Crore, I will retire or I need Rs. 20 Lakhs for my kid’s education, etc.’
  • Most of the times we calculate our money targets on the basis of current prices and income. Inflation gradually increases the cost of living, as it reduces the value of your money over the years.
  • Not considering the inflation rate leads to insufficient goal corpus. Hence, always take into consideration the current and expected rate of inflation, while calculating your goal corpus. We have explained this better in our article – ‘Impact of Inflation’.

3. Insufficient Health Coverage or Health Corpus :

  • Medical Expenses tend to gradually increase as a person grows old. With the ever-increasing medical costs, it becomes vital to ensure that you have enough health cover or health corpus that can take care of various unexpected medical expenses from time to time.
  • The Medical Inflation in India is likely to rise at double the Inflation rate. A report by Mercer Marsh Benefits, said forecasted medical inflation rate will be 10% in India, while actual inflation will be at 5%, elsewhere.

4. Acquiring High Debt :

  • Persons in the age group of 30-60 years have multiple loans. Personal loan, home loan or car loan and credit card debts must be kept to a minimum by middle age group.
  • A person cannot make any progress towards achieving goals for the parents as well as children, if he is simultaneously paying 15-30% interest on his debts while earning 12-15% on his investment portfolio.
  • Budgeting is the best way to get out of this habit. For the detailed exaplaination regarding ‘What is Budgeting’, Refer : https://finplanyadnya.in/

5. Exiting from Equities on panic :

  • Investors panic seeing equity investment portfolio drop 10% or more. When market falls, suddenly all factors become negative, all communication become negative and there is a sense of doom but things improve quickly as well.
  • Don’t make the mistake that many did in 2009 or 2011 or in Oct 2018 by selling stocks from portfolio due to fear and then missing out on the recovery. Volatility is part and parcel of markets and must be taken as opportunity to invest rather than an opportunity to exit.

6. Investing in One Asset Class (Real Estate) :

  • Most investors simply construct their portfolio’s by having all their investments in one asset class, especially real estate which is a bad idea. Diversification of portfolio is a key to success while investment planning.
  • Calculated risks and diversifying portfolio into stocks and debts is more likely to produce consistent returns over the time rather than investing in a single asset. It is impossible for one asset to keep on increasing consistently and we have seen that in real estate or gold markets in last 3-4 years, where upside has been almost negligible.

7. Mixing Insurance with Investments :

  • As soon as there is a dependent within the family (non-working spouse, elderly dependent parents or a child), the individual must ensure that he has adequate Life Insurance.
  • One should buy a term insurance policy to meet his life insurance needs and avoid insurance-cum-investment products like ULIP’s, Endowment plans, etc. where, despite paying a high premium every year, the life cover may not be adequate.
  • Refer : https://finplanyadnya.in/ , Here, we have explained this concept better in our article – ‘Types of Life Insurance in India’.

8. Investing in Complex Financial Products :

  • Many of us love exotic financial products based on crazy algorithms. Products such as International funds, fund of funds, derivatives, penny stock investing, exotic PMS etc.
  • We believe, these type of investments are good for your surplus money (after your goals are taken care of) but better not to invest in them, for your financial plan related investments.
  • Choose simple products like a diversified equity fund or some good bluechip stocks, etc. which give good & consistent returns.

9. Concentrating on Tax Saving :

  • Instead of concentrating on wealth expansion, many of us concentrate more on tax saving. In a bid to save maximum taxes, we invest in instruments that do not give much returns and put in big lock-ins.
  • So where we could gain good returns, we do not earn much by investing solely for the purpose of tax saving and then locking the money for very long term.

10. Not Reviewing your financial plan periodically :

  • Formation of a financial plan isn’t of any use, if we don’t implement and review it properly. We should not take it as a onetime activity as it requires periodic reviews. Since financial plans are long-term plans, sticking to one single strategy would result in a faltered output.
  • Any event in life which affects your finances and savings pattern will require an alteration in your investment strategy. Make sure you re-examine your plan periodically so that the market changes, your lifestyle changes, etc. are also taken into account.
  • We have explained this better in our article – ‘Importance of Financial Plan Review’. Refer : https://finplanyadnya.in/

Following Vedios will also explain what are the mistakes to avoid in financial planning.

World Savings Day (31st October)

Happy World Savings Day | 31st Oct

Are You Able To Make 30% Savings?


Wish you all a very happy World Savings Day!! Amidst recent festive season, what used to strike in the media every day before you? The dominant message was “Spend”. There was almost nothing where the message was “Save”. Lets discuss few important saving thumb rules on the occasion of World Savings Day (31st October).

Financial Planning Knowledge Bank by Invest Yadnya
Financial Planning Knowledge Bank by Invest Yadnya

Happy World Savings Day | 31st October

World Savings Day is celebrated on 31st October all across the world in major developed markets/ developed economies, but in India it is celebrated on 30th October.

Here are 3 key thumb rules of savings :

Key Thumb Rules of Saving
Key Thumb Rules of Saving

1. Inculcate Habit of Saving

  • People can inculcate the habit of saving and keep them motivated for more savings only when following 3 conditions are fulfilled :
    1. Regular investing, such as through an SIP (Systematic Investment Plan)
    2. An asset class having an upside potential and giving capital appreciation
    3. A sufficiently short lock-in period, whereby a young investor can look forward to actually reaping the rewards of self-denial
  • It is the combination of all three that drives people to invest more after they start investing.
  • Obviously people will found themselves having a higher awareness about their financial situation when they see their savings / investments growing.
  • Because unless and until one start investing, he would spend a lot of money on useless small expenses or materialistic things that could well be avoided.

2. Start Early Saving & Investing

  • Many people wait too long to start saving money and thus investing it. A late start for investing means you will spend years effortfully trying to build wealth you would otherwise have easily made. Thus, no strategy can beat the returns which could have been achieved with the early head start.
  • The advantages of starting to invest early are exceptional. In most cases, you don’t have anyone depending on your income when you start earning. That is the best time to inculcate the habit of saving.
  • You might want to spend the money you earn on products and services. But if you start your investments as early as possible and manage to invest even a small amount to begin with, you’ll see your savings grow substantially. It is only because of the power of compounding.
  • Financial discipline and holding period of investment (time) are paramount to you achieving your financial goals.

3. Follow A Process Oriented Approach – Financial Planning

  • Among the different types of investment classes, it may appear that the biggest problem is where to invest? But it is actually a secondary problem.
  • The biggest problem is that the very large mass of people doesn’t save or doesn’t save enough. Whatever the people do save is without real awareness, without projecting into the future. Thus their investment approach might be without triggering the thought process that would lead them to save more and save better.
  • One should allows follow a process oriented investment approach than a product oriented one. Before, going to start investing in random asset classes by referring their historical returns, one should analyze their financial goals, investment horizon, risk appetite etc. One should adopt a proper financial planning approach while starting investing.

50-30-20 Rule – Are You Able To Make 30% Savings?

Explaining 50-30-20 Rule
What is 50-30-20 Rule?
What is 50-30-20 Rule?
  • 50-30-20 rule of budgeting can be explained as follows :
  • 50% – Spending : Your needs or spending which should be limited to just 50% of your net income.
  • 30% – Savings for Long-term goals : Your savings & Investments accounting for your Long-term goals, should be at least 30% of the money you earn each month.
  • 20% – Wants or Short-term goals should only take up 20% of your budget and spending.
Elaborating 3 Components of 50-30-20 Rule
  • 50% Spending :
    • Household Expenses
    • EMI or Rent (EMI should be maximum up to 30-35% of your monthly income)
    • Children Education Expenses
  • 30% Savings & Investments for Long-term goals :
    • Retirement
    • Children Graduation and Post Graduation
    • Children Marriage
    • Any Other Need
  • 20% Wants or Short-term goals :
    • Vacation
    • Down-payment for Home Loan
    • Car etc.
4 Money Lessons from Diwali

4 Money Lessons From Diwali

Important Money Lessons Diwali Teaches Us


In this article, we are going to discuss the 4 important money lessons from the festival of Diwali so that you can do your financial planning in a proper way. It will help you fulfill your various financial goals. Every year, we celebrate Diwali with a lot of enthusiasm and elegance. Diwali brings auspiciousness and prosperity in our lives.

Financial Planning Knowledge Bank by Invest Yadnya
Financial Planning Knowledge Bank by Invest Yadnya

4 Money Lessons From Diwali – Festival of Light

There are a number of festivals in our culture which teaches us various moral lessons. However, these festivals are also a great source to learn various financial lessons too.

Lets discuss the 4 important money lessons from ‘Diwali’, popularly known as ‘Festival of Lights’.

4 Money Lessons From Diwali
4 Money Lessons From Diwali

1. Time to ‘Clean up’ Your Investment Portfolio

  • Before Diwali, we clean our homes, re-assemble things in a better manner and dispose of the stuff which is not required as per the current need. You can apply the same concept when it comes to your investments.
  • You should review your Investment portfolio regularly. One should identify the non-performing investment schemes with respect to the timely and anticipated returns and discard them appropriately.
  • Non-performing or unsatisfactorily performing assets will adversely affect the performance of your entire investment portfolio. In such case, you need to eliminate them to optimize the performance of the overall portfolio.

2. Get Rid of The Darkness of Financial Ignorance

  • Diwali is celebrated with the lightening of lamps, which remove the darkness surrounding us. A lamp signifies knowledge through which darkness is eliminated. Similarly, you can diminish the darkness or ignorance related to finance and investments.
  • You should identify your past financial mistakes such as :
    • Choosing a wrong financial product : Going with a product-oriented approach than a process-oriented approach of financial planning
    • Opting a wrong financial scheme or fund which is providing you consistently lower returns than estimated, which will not help you towards achieving your financial goal.
  • After identifying the financial mistakes, you need to take the corrective action so that the same financial mistakes will not occur next time in the future.
  • You need to follow a proper financial planning approach and set your short-term & long-term goals. You can take the help of a financial planner for the same.

3. Play Safe via Risk Management

  • Though we enjoy fireworks, it all requires to take the needed measures to keep us safe. It is crucial to ensure precautionary ways to avoid any accident leading to a significant loss.
  • Similarly, the same calculated risk with safety net should be applied in money matters as well. Thus, it is essential to get your life and your assets protected through a financial arrangement which will offer a safety net to your family in case of any unforeseen emergency.
  • Under risk management, Life Insurance, Health Insurance, Home Insurance and Vehicle Insurance play an important role.

4. Diversify Your Financial Portfolio

  • In diwali, you tend to buy a variety of sweets, fruits, gifts to have a joyous and fun time with your entire family with a variety of options. We create a great variety in diwali decoration, sweets, gifts and rangoli colours.
  • In the same way, your financial portfolio should have the same diversification and variety. You can choose a combination of schemes having varying risk & return profile. It will help you to achieve financial balance and stability.


  • Diwali is a celebration of lights. This festival teaches various money management lessons, which we can implement in real life. It will help us lead the way towards a strong financial planning.
  • The cost of delay in investing or not taking right decisions can be huge. It will impact the future in the long run. Therefore, it is thus advisable to choose investment options that are concurrent with your financial goals.
  • It is time to plan your investments and celebrate a safe, sparkling and financially planned Diwali!!
Types of Asset Classes

Invest Smartly during Economic Slowdown | Where One Should Invest?

Choose the Right Financial Asset – Equity / Debt / Gold / Real Estate


In this article, we are going to discuss how one can invest smartly during economic slowdown. In these challenging times, how and where one should invest, because choosing the right financial asset between equity / debt / gold / real estate is very crucial in building the financial portfolio.

Personal Financial Planning Knowledge Bank by Invest Yadnya
Personal Financial Planning Knowledge Bank by Invest Yadnya

Invest Smartly During Economic Slowdown | Where One Should Invest?

There are 4 main type of asset classes in which Indian Investors invest overwhelmingly.

Types of asset classes
Invest Smartly during Economic Slowdown | Where One Should Invest?

1. Equity

Entry into Equity Market with High Returns Expectations
  • The current economic slowdown and a volatile stock market are two main reasons spreading the nervousness amongst the investors. Many investors started investing in mutual funds in 2018 after the ‘Mutual Fund Sahi Hai’ awareness program by conducted by AMFI (Association of Mutual Funds in India).
  • The investors had started investing mutual funds with a high expectations of returns, just by seeing the higher side trailing returns specifically from Mid cap and Small cap funds in 2017-18.
  • However, now they are wondering whether they have made a mistake by investing in equity mutual funds. Because since the peak of January-2018, Mid Cap Index has corrected by 25%, while the Small Cap Index has corrected by almost 40%.
  • On the other hand, Nifty is up around 7% for the same period. Some good stocks are pulling up certain indices, but most mutual fund schemes are gazing at losses.
Equity Mutual Funds – Benchmark Trailing Returns
  • With this scenario, some investors are thinking whether they should stop their SIPs in equity mutual funds.
  • Others are feeling depressed after comparing the negative returns offered by equity schemes with decent returns offered by fixed deposits, debt schemes, PPF etc.
  • Some fainthearted investors are looking at even to sell their equity mutual funds.

2. Debt

  • Debt Funds :
    • Close-ended debt funds (Fixed Maturity Plans) :
      • These plans invest in various types of fixed income options such as bonds, bank certificate of deposits etc. which mature on or before the maturity date.
    • Open-ended debt funds
      • These funds are considered less volatile than equity thereby offering stable returns as compared to equities. They also invest in various debt instruments such as corporate bonds, treasury bills, government securities etc. These schemes are professionally managed by debt fund managers.
      • There are different types of debt mutual funds such as liquid funds/money-market funds, short-term income funds, gilt funds, corporate bond funds etc.
      • These funds invest in various instruments of different time horizons and carrying different levels of risk. An investor can invest in these funds depending on his/her time horizon and risk appetite.
  • Fixed Deposits (FD) :
    • Bank fixed deposits (FDs) is another popular investment option which offers fixed returns. One can invest in a bank FD by visiting his/her branch or via Net-banking.
    • Bank FDs offer cumulative and non-cumulative options. In the cumulative option, the interest is re-invested and payable on maturity whereas, in the non-cumulative option, interest is payable periodically (monthly, quarterly or annually depending on the bank).
    • Interest is added to your income and taxed as per your income tax slabs. Interest is subject to tax deducted source (TDS).

3. Gold

  • During the recent volatile or falling equity market since IL&FS crisis, investors saw the appreciation in the value of the Gold and can easily get fascinated towards it as an investment option.
  • From an investment perspective, it is true that during short term turbulent times, gold has historically provided some safety cushion against riskier asset classes like equity.  
  • However, when we look at relatively longer time periods, gold has underperformed equities. For example, since the beginning of this decade till prior to the IL&FS crisis in mid 2018, gold had generated a compounded annualized growth rate (CAGR) of 6% vis-a-vis almost 10% for Nifty50.
  • And this will always be the case in future also. The reason is that gold does not actually produce anything or create any value. Unlike equity or bonds or bank deposits, the money that you invest in gold does not contribute to economic growth. The same amount of money put into a good business or any other productive economic activity will create wealth.
  • Hence, gold should not be viewed as an asset class to meet long term financial goals. If an investor wants exposure to gold, it should be from the perspective of stability in portfolio returns when other asset classes are performing poorly. Investment options in gold come in the form of :
    1. Gold Funds
    2. Gold ETFs
    3. Digital Gold

4. Real Estate

  • People buy a house either for self-occupation or to earn rental income and capital gains from it.
  • However, investing in real estate to earn rental income is not considered as a good investment. This is because:
    1. Rental income earned from house ranges usually between 2-3 per cent a year.
    2. The appreciation in the prices of house property depends on various factors such as size, locality, location etc.
    3. Before making an investment in property, one must evaluate based on safety, liquidity, returns and other similar parameters.
  • Thus, Real estate investment is good from self-occupation perspective only, but one should not invest in real estate for getting regular returns from that investment.

Thus, in this kind of confusing mind state amongst the investors right now, let us try to answer how one can invest smartly during current economic slowdown phase.

Invest Smartly – Follow a Process Based Approach Rather Than a Product Based Approach

  • One should build the portfolio by executing a proper financial planning rather than referring the trailing returns of any fund.
  • A proper financial plan should be created in accordance with the parameters like :
    1. What is your financial goal?
    2. How much is the investment horizon?
    3. What is your risk profile?
    4. How much returns are you expecting?
  • You can choose the suitable asset allocation strategy with respect to the financial goal and investment horizon.
  • Thus, you should follow your investment strategies, especially in times of market volatility. You should always remember that equity investments are only suitable for long term, more than five or ten years.


  • Thus rather than taking the panic decisions regarding your portfolio, one should use the current economic slowdown phase as an opportunity to make money. It is a good time to review your investments and diversify your portfolio.
  • The key is to follow a proper financial planning approach, which is a process base approach. You need to stick to the financial plan, irrespective of any temporary or short term market movement. In this way, you can create wealth and meet your financial goals. 
  • One can assess the market conditions by linking it to your financial planning and current investments and redefine the path to your financial goals, if needed. Not making rash decisions and staying invested is the key to wealth creation.
  • Market slowdown is a good time for you to check and correct your expectations from the stock market for the next couple of years. You need to realign your portfolio expecting returns accordingly.
5 Golden Questions of Financial Planning

5 Golden Questions about Financial Planning

Questions about Financial Planning To Ask Yourself !


In this article, we are going to discuss the 5 Golden Questions about Financial Planning. Before you start the financial planning process and building your portfolio, you should ask these questions yourself.

5 Golden Questions About Financial Planning

Here are the 5 Golden questions about financial planning which should get answered before you build your portfolio.

5 Golden Questions of Financial Planning
5 Golden Questions about Financial Planning

1.Net Worth?

  • When you start with your financial planning, you should first check the status of your Net Worth? Where do you stand? What is your current Net Worth?
  • For calculating the net worth, we should know the two aspects – Assets and Liabilities. What are your current Assets and current Liabilities?
  • When you are calculating your net worth from financial planning point of view, you should include only your financial assets in assets heads. Don’t include your real estate assets here because of the difficulties in the liquidation of real estate assets. While you can liquidate the financial assets whenever you are going to achieve your financial goals.
  • Following assets are considered as financials assets –
    1. Equity side : Equity Stocks, Equity mutual funds, ULIPs
    2. Debt side : Fixed Deposits, Debt Funds, PPF, EPF, LIC policy
    3. Liquid : Savings Account, Current Account, Liquid Funds
  • Net Worth = Assets – Liabilities
  • Thus, You can get an idea of your existing assets from the net worth number. And thereby. You can link these existing assets with your financial plan.
  • Thus, knowing your current net worth is the key parameter of financial planning.

2.Financial Goals?

  • Secondly, you should ask yourself what are my financial goals?
  • There are 3 types of financial goals based on the horizon :
    1. Short-term Financial Goals : Realising in 0-3 years
    2. Medium-term Financial Goals : Realising in 3-5 years
    3. Long-term Financial Goals : Realising in 5+ years
  • So you should enlist your financial goals according the horizon and then categorize them accordingly. While enlisting the financial goals, there are mainly two types :
  • Need-based goals and Want-based goals. So you should understand what are your need and should cover them on priority. Thus, after covering your needs, you can plan for your wants with the surplus available with you.
  • In the Indian context, Need-based Financial Goals are First Home, Children Education, Children Marriage, Retirement etc. On the other hand, Want-based goals are Vacation, Big Car, Foreign Trips etc.

3.Amount Required For Achieving The Goals?

  • Here, we calculate the amount that will be required for achieving/realising your financial goals. In this parameters, you should analyse how realistic are your goals? You can get the amount required for your goals as of today. But for achieving your future goals, you should always consider the inflation.
  • When you are considering the life-style inflation, you should take inflation range to be 7%-8% per annum.
  • While the education inflation is recommended to be at 10%. The recommendation of education inflation is based on the historical education expenses and its percentage growth.
  • Therefore, Inflation is a significant factor in calculation of amount required for achieving the goals.

4.Risk Appetite or Risk Taking Capacity?

  • It is also a very important factor in financial planning. You should first ask yourself, what is my risk taking capacity? Most of the investors enter into the market just by seeing the returns of the last 1-2 years. You should always focus on your risk appetite and your financial goals rather than investing blindly by going after the returns. Your financial planning process should not be return-driven only. So one must understand his risk taking capacity or how much volatility he can sustain.
  • For example, Are you ready for Averaging out of your portfolio, when it is down by say 10%? Many investors begin to redeem their investments instantly if below expected or negative returns are achieved. So, when there is a down-turn in the market cycle, you can realised exactly what is your risk taking capacity. Thus, you should build your portfolio accordingly.
  • If you are not ready to sustain such negative returns, then you should go with the less risky investment options such as Fixed Income Securities, Debt Funds, Government securities etc. And if your financial goals are not in a position to be achieved with such low volatile and low returns instruments, then you should toned down your financial goals. Because if you are not having that much risk appetite or having some behaviour management issues with volatile instruments to generate the expected returns, then it is advisable to scale down your financial goals.
  • Thus, rather than going into the equity out of your risk taking capacity just for higher returns, it is always better to be realistic with your portfolio according to your risk appetite. The underlying risk should also be taken into the consideration. Basically, we should not look at the market volatility as a risk. So just because of the volatility in the market, you should not redeem your investments.
  • So you should always analyse your portfolio properly before making such prompt or emotion-driven decisions.

5.Investment Options?

  • What are the different types of investment options? Normally, an investor with the higher risk taking capacity is advisable to choose equity investment options.
    1. On a broader base, a medium risk taking capacity investor is recommended to go with debt funds, RDs for the short-term financial goals realising in 0-3 years.
    2. For an investment horizon of 3-5 years, you can invest in Hybrid Funds. Hybrid funds are with a combination of Equity and Debt characteristics.
    3. For an investment horizon of 5-7 years, you can consider Large Cap Funds, Index Funds etc.
    4. If your investment horizon is 7-10years, then you can invest in Multicap Funds (ie. Mix of Large + Mid + Small Cap Stocks).
    5. And for an investment horizon of 10+ years and you are an aggressive investors, then you can choose Small cap  and Mid cap funds.
  • Here, we have discussed about only Mutual Funds and not the Stocks Investments. It is because when we are building our portfolio from the angle of financial planning, it is always better to stick to the mutual funds. Once, you have covered all your financial planning goals, then you can invest in the stocks with the available surplus funds with you. And you should build the mentality of investing in the stocks like a shareholder or a long-term investor and not like a trader.
  • For a more detailed comparative analysis, please refer our article :  Mutual Funds vs Stocks
  • You can try our stock subscription, here we have tried to make the retail investors understand the business model and the fundamental analysis of the stock. Rather than going for buying/selling target price of the stock, you should build an approach to become a long-term investor or a shareholder of the company. Thus, it is very important to understand the business of that stock to build that conviction for holding the stock in long-term.

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