'Investing your surplus money judiciously is always beneficial'

Investing your surplus money judiciously on a regular basis is always beneficial for your long-term financial well-being.

Investing your surplus money judiciously on a regular basis is always beneficial for your long-term financial well-being. It is also a good practice to have your portfolio spread across diverse asset classes, including stocks, mutual funds, commodities and real estate. Adequate insurance, be it life or health cover, is also a must in your portfolio. The question is, what are you investing for? Well, it is about wanting your money to grow and getting the money when you need it by selling those assets. Or it may be to leave something behind for your near and dear ones in case something happens to you. But many a times cashing out of your investments may become a tricky issue. For money to flow back into your bank account you must ensure that documents related to the asset are in order and that you have complied with all regulatory requirements. Gaps appear many a times. Finding yourself stuck at the time of exit may be devastating should you require the money urgently.

Do you know the various ways in which you can find yourself in a jam? There may be many. Some of these may be due to oversight or non-compliance on your part due to circumstances beyond your control such as the regulator suspending a stock from trading on the exchanges or having it forcibly delisted. Or while you had your eyes off, the market gradually lost interest in the stock you hold, making it illiquid with no one standing at the buyer's end willing to pick it up when you want to sell. What do you do if over the years your signature has changed and does not match with the one that you put on the form at the time of investing? Or maybe you did not notice that the spelling of your name as available with the mutual fund house or the insurance provider does not match with your actual name. You need to be extra careful in case of insurance because oversight may leave your legal heir struggling to claim the money when you are not around. It may happen during unfortunate instances where the life insured and the nominee expire at the same time. If you are the legal claimant in such a situation, how do you go about your task? In our cover story, we try to bring to you some of the common reasons investors get stuck at the time of exit and apprise you of the ways that you can extricate yourself from the tangle. We hope that the knowledge helps to keep you alert so that you don't get caught on the wrong foot ever.

We bring you some pearls of wisdom from celebrated investor, Peter Lynch, to enable you to know how you can use them to spot some quality stocks in the crowded market. If you are a commodity investor, also read our story on the top performing commodities in 2013 and how they are likely to fare in 2014.