Lately I have been receiving several questions on “where do I invest xyz amount?”. Typically, the sender wants to know the funds for starting an SIP or making a lump sum investment in mutual funds.
The issue is that this approach is half-baked. There is an attempt to jump straight to investments not understanding that there are prior steps to be completed before addressing the investment question.
Typically this results in random acts of investments (buying this and that) without knowing whether something is really a fit. Such investments can hold back your investment portfolio from delivering the right outcomes. Buying traditional insurance policies and choosing dividend option in an equity mutual fund are examples of such nonsense.
As far as money and investments are concerned, one needs to take a step by step approach. Personally, I would like to see the initial steps marked complete before the investment question is raised.
One tool that can be of great help to you is a checklist.