5 Requirements to be a Sophisticated Investor – HowFlux

5 Requirements to be a Sophisticated Investor

How to Become a Sophisticated Investor


An investor is the individual/professional who invests in a particular thing or business. He can be a policy investor, a debentures investor, a mutual fund investor and even a share market investor or a real life money investor or a real-estate investor. If you are investing in a sophisticated way of investing, your investment is always likely to bring favorable results. We talked with several investors about this and approximately all of them agreed upon some facts for sophisticated investment. Some of those agreed facts have been mentioned here by us.

5 Requirements to be a Sophisticated Investor

5 Requirements to be a Sophisticated Investor

1. Knowledge of the Field Where You Make Investments:-

If I talk about the richest person on this earth, once he was asked that, what will you do if all your money ends and you are left with just a few pennies? How will you start your business. The millionaire just smiled and replied,” I will choose network Marketing”. He was aware about the fact that when you invest in people, they invest in you and thus money making won’t be tough for him even if he starts again with a big zero.

The knowledge of the field where you are going to invest is thus always necessary. You always make mistakes when you are not familiar with a particular field of investment.

2. One with an Experience:-

The one with an experience in a particular field always makes you win the battle. Suppose if you are planning to invest in real estate by purchasing several plots of land and then joining them to develop a big city with flats and buildings in it for sales, you will first need a person who has an experience of a particular area to safeguard yourself against the frauds made on Panchayati land or government based property and the other cases of frauds like selling the same property to different multiple customers. Even if you invest in share market, the experience of observation of shares of multiple companies and their present situation in the market does counts.

3. Keep Your Port Folio Diversified:-

You should always keep your portfolio diversified in order to become a sophisticated investor. You should also not forget to monitor it regularly. A disciplined routine should be followed in order to be a sophisticated investor and besides this, you should also be regular and punctual about reaching everywhere in time as time waits for none.

4. Beware About the Market:-

A sophisticated investor is always generated in the market and not by sitting at home. A sophisticated investor always planned everything before committing it. Even if he makes a loss, he takes it as an experience and thus starts again with a new positive approach avoiding the mistakes made in the past.

5. Know What Makes You Gain Profits:-

Besides all the above mentioned factors, a perfect sophisticated investor also keeps a watch over things that make him gain profits and things that makes him gain losses.

According to Mr. Dinesh Aggarwal, who is both a financer as well as an investor, if you find losses in share market, you should try mutual funds and if you find losses in mutual funds you should try debentures as any company makes the first payment for its debenture holders. He also acclaimed that profit or loss is always invited by the investor himself and nobody else is ever responsible for it.


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