Investment Process

Know the important steps of the investment process.
Investment Process
3 min

Investing can seem overwhelming, but it does not have to be. A successful investment journey starts with understanding the basics and following a structured approach. This guide breaks down the investment process into five easy-to-follow steps, help you to make informed decisions and build a secure financial future.

What is the investment process?

The investment process is a systematic way to choose where to put your money to achieve your financial goals. It is a roadmap to help you select investments that match your needs, manage your portfolio over time, and stay on track toward your desired outcomes.

To diversify your investment portfolio, consider adding an FD for its guaranteed returns.

Why is an investment process important?

A defined investment process helps avoid emotional decisions driven by fear or greed. It provides a framework for careful planning, reducing impulsive actions that might derail your long-term plans. It also helps you regularly assess your investments to ensure they still are aligning with your evolving needs.

5 important investment management process steps

1. Evaluating your investment goals

Before you start investing, it is essential to evaluate your investment goals. Are you aiming for long-term wealth creation, steady income, or prioritising the safety of your funds? Your goals will likely change with your age and income. Young investors might prioritise aggressive growth for wealth accumulation, while those in midlife may focus on income generation or building a retirement fund. By clearly defining your goals, you will be able to select the right investments and tailor a strategy that helps you achieve those targets.

2. Evaluating your financial situation

Successful investing is not just about choosing the right assets – it starts with discipline and savings. After setting your financial goals, it is crucial to analyse your current financial situation. This gives you a realistic understanding of how much you can save each month to reach your targets. Before diving into investments, look closely at your monthly expenses, existing assets, debts, and your overall ability to handle financial risk.

3. Asset allocation: Building a balanced portfolio

Choose the investment mix that suits your risk appetite and needs from options like fixed deposit, equity (stocks), bonds, money market instruments, gold, and real estate. Remember, diversifying your assets across these classes is crucial for minimising risk. While your initial asset allocation should reflect your current financial situation, never be afraid to adjust it as your income, age, and risk tolerance change. Make sure to include both liquid assets for immediate needs and fixed-income investments for those long-term goals.

The perfect portfolio for you depends on your individual goals risk tolerance. Here is a quick overview:

  • Aggressive: If you seek high growth potential and are comfortable with volatility, this portfolio emphasises riskier assets.
  • Defensive: This option prioritises stability and includes assets that are less affected by market fluctuation. For example fixed deposit
  • Income: Designed for those seeking regular income, this portfolio focuses on investments that offer dividends and distributions. You can invest in a fixed deposit, which offers regular payout options such as monthly, quarterly, half-yearly, annually, or at maturity.
  • Hybrid: A hybrid portfolio combines a variety of assets, such as stocks, bonds, and real estate, offering a balance of growth and stability.

4. Choosing the right investment strategy

A smart investment strategy is key for steady returns that meet your goals. Here are the main approaches:

  1. Short-term: This strategy focuses on investments like short-term bonds, cash funds, and money market instruments, offering returns over a shorter period.
  2. Long-term: this is where you invest in stocks, mutual funds, real estate, or gold to build wealth over time. While returns can be higher, your money is tied up for longer.

Fixed deposits can fit into both your short-term and long-term financial goals. Bajaj Finance Fixed Deposit offers flexible tenures ranging from 12-60 months. You can easily select a tenure that aligns with your financial goals.

5. Track and manage your portfolio

The investment process does not end after you buy assets. Regularly review your portfolio's performance to ensure your investments are still on track to reach your financial goals. Adjust your asset allocation as needed based on how your investments are doing, changes in the market, and shifts in your own risk tolerance. Knowing when to buy and sell specific assets is crucial for maximising returns and minimising losses.


An effective investment process combines smart asset allocation, diversification, and well-timed decisions about when to buy and sell. This approach allows you to build and manage a portfolio that aligns perfectly with your financial goals and how much risk you're comfortable taking.


As regards deposit taking activity of Bajaj Finance Ltd (BFL), the viewers may refer to the advertisement in the Indian Express (Mumbai Edition) and Loksatta (Pune Edition) furnished in the application form for soliciting public deposits or refer
The company is having a valid Certificate of Registration dated March 5, 1998 issued by the Reserve Bank of India under section 45 IA of the Reserve Bank of India Act, 1934. However, the RBI does not accept any responsibility or guarantee about the present position as to the financial soundness of the company or for the correctness of any of the statements or representations made or opinions expressed by the company and for repayment of deposits/discharge of the liabilities by the company.

For the FD calculator the actual returns may vary slightly if the Fixed Deposit tenure includes a leap year.