What should a good investment portfolio look like?

You have just started earning and you are already aware of the importance of financial planning. You understand that you must start young to begin saving to meet your financial goals. Your needs may be different, ranging from pursuing a higher education, buying a house, starting a family or saving for your retirement, but accordingly you also need to have a robust portfolio in place which will address your long/short term goals.

Below are a few check points that one may consider to have a healthy portfolio:

1. Goal Oriented: Different financial products are built to meet different needs. A product which may meet long term needs very well might even give negative returns in the short term. Hence, first evaluate what you are saving for, and by when you would need the money and invest in product appropriately.
2. Do Your Research: Going by the recommendations of mentors and friends is not always bad, but one must also back the advice with sound personal research. Understand the pros and cons of the product you are getting into and choose wisely. It is also important to realise that financial products not only provide you tax exemption but also provide for your future. Thus, pick products that not only help you save tax but which also enable you to realise your goals.
3. Capital Appreciation: Everyone seeks to invest to grow their investment; however, few realise the difference between the profits on paper and the real returns. Your capital appreciation should take into account tax-deductions and loss of monetary value due to inflation. While choosing a product, always take into account the inflation and tax factor such that your returns in the long term are over and above these. E.g. If you are looking at long terms, Real estate and equity markets would be a good choice, whereas returns on a Fixed Deposit account are usually negligible.
4. Cover Your Risk: There is not product in the market that can cover 100% the risk of you losing your investment corpus. The only form of risk cover you can exercise is to be aware of the risk yourselves and take timely action. Begin with taking an adequate Insurance. Top this up by being aware of the world, the country and the local markets. Remember news can make a huge impact and monitoring your investments is very important. Prepare for the worst and take decisions accordingly.
5. Liquidity: A healthy portfolio has the right proportion of assets that are liquid to address emergency needs. Make sure yours has one too which help you divert your funds when you need it the most.

In the end, make sure that you are aware of what your portfolio is made of, and if it will address your goals adequately.