Follow these guidelines to become a smart investor in 2015 :: ET

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The start of the New Year is a time to let go of the past and start on a clean slate. As you get ready to usher in 2015, here are a few measures that could make you a better investor and help in improving your finances. Even if you manage to keep 4-5 of these dozen principles to yourself, you will find financial success in 2015.

I will Start Investing in Direct MFs

Direct plans of mutual funds are cheaper. On an average, the investor in a direct plan of an equity fund pays 50 basis points less in annual charges compared with a regular plan. Lower costs mean higher returns for the investor. The difference is smaller (about 15 basis points) in case of debt funds. A basis point is one-hundredth of a percentage point.

I Won't Buy Policy I don't Understand

Life insurance plans can be complicated products. Some give large covers, others act as savings instruments. Some charge a premium for the entire term, others for a limited period. Some offer cover for life, others till a certain age. Some pay at regular intervals, others give out a lumpsum. Each policy has its own utility. Understand your needs and then buy a policy.

I will Learn to File Tax Return Myself

Filing your tax returns is not rocket science. Even someone with basic knowledge of taxation terms can do it herself. Tax filing portals have made the process easier by explaining the jargon in the forms.

For a small fee, they even check your tax return for mistakes and guide you on the best ways to save tax. Get over your aversion for this annual ritual and file the return yourself this year.
Follow these guidelines to become a smart investor in 2015 I won't Shy Away from Stocks

2014 saw the Sensex touching an all-time high. While this was good news for stock investors, many retail investors regretted that they were not fully invested.

Don't shy away from stocks in the New Year, but neither should you go overboard while investing in them — just stick to your asset allocation.

I'll Review Portfolio and Rebalance it

Studies have shown that in the long term, maintaining the asset allocation of the portfolio yields better results than earning high returns from an asset class. Rebalance your portfolio at least once a year so that it regains the asset mix you had planned for yourself.

I won't Invest in Equities Short Term

Equity was the flavour of the season in 2014 and some experts have predicted that the best is yet to come. However, stock indices will not move in a straight line from here. The mood may be bullish, but there will be lots of ups and downs. Don't invest in stocks if you have an investment horizon of less than 3-4 years.

I'll Assess Health Insurance Needs

Healthcare has become very expensive and even a short stay in hospital can leave you with a bill running into six digits. The only way to safeguard your finances against medical expenses is by taking adequate health insurance. It is best to buy a floater cover for the entire family.

New Skill to Up Career Prospects

The job market is a jungle in which only the fittest will thrive. Hone your skills or learn something new to stay ahead of the herd and make yourself indispensable at the workplace. Not only will you be in demand from other companies, but your own employer will leave no stone unturned to retain you.

I will Renegotiate my Home Loan

It's widely expected that interest rates will decline in 2015, but the reduction will not be uniform across lenders. Look around for the best rates for long-term loans and switch to a lower rate if possible. If the loan has more than seven years to go, even a small reduction in the interest rate can save you a neat packet.

A Job That Suits my Profile Better

Are you unhappy, underpaid or just plain bored with your job? If this is the winter of your discontent at the workplace, update your resume and start searching for a better job in 2015. The job market is buzzing with offers and the sky is the limit for the right candidate. Step out of your comfort zone and turn proactive.

I will Get Rid of Poor Performers

Equity funds gave spectacular returns in 2014, with some doubling your money in 12 months. But some funds performed poorly. Despite the Nifty rising 30% and some funds shooting up 45% in 2014, some large cap funds rose just 20%. It's time to give such laggards the boot and shift your money elsewhere.

Won't Let Other Goals Hit Retirement

Your child's education, a new car, a second house in the suburbs — don't let your other goals crowd out the retirement planning. Whether you like it or not, one day you will retire. While you can take a loan for all other goals, it won't be possible to do this to fund your retirement.