An investor passes through four different phases in life

 Accumulation Phase
 Consolidation Phase
 Spending Phase
 Gifting Phase

Accumulation Phase

Investor early or middle to their career tries to accumulate fund so that individual can
have money to spend in the later phase of their life. Some people accumulate the fund to
buy house, car or other important assets and some people accumulate for their children’s
education cost, life peaceful life after retirement.Funds invested in the early phase of life
gives an investor a huge amount of fund which is compounding over the years

Consolidation Phase

Consolidation phase is the midpoint of their career, in this phase, they earn more, spends
more and pay off all their debts. In this phase moderately high risk taken by the investor
but for capital reservation some investor prefer lower risk investor. Individual invest in
the capital market and investment securities.

Spending Phase

This phase starts when an individual retires from the job. Their overall portfolio is to be
less risky than the consolidation phase; they prefer low risky investment or risk-free
investment. People prefer fixed income securities like a bond, debenture, treasury bills
etc. In this phase, they need some risky investor if they have extra money so that future
inflation can be adjusted.

Gifting Phase

If individuals believe that they have enough extra funds to meet their current and future
expenses then they go for gifting money to their friends, family members or establish
charitable trusts. These can reduce their income taxes and they also keep some fun for
future uncertainties.

Over the different phase, investor behaves differently and invest in their preferred sector
according to their risk-taking behavior.
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