Saturday, September 23, 2023

5 Important Investment tips you should know to get started

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Shreya Christina
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Are you excited about saving for your world tour or your children’s education? But getting confused about the bulls and bears? This blog gives some tips for first-time investors to help in the glamorous world of investments. 

To begin an investment journey can be intimidating because of the enormous availability of investment options in the market. There is a lot to learn before starting the investment. 

Even though there are several complex terms used by the Wolves of Wall Street, the basic classification of investments are:

  1. Cash reserves – This is the money you save in banks to meet emergencies
  2. Financial investment – These are investments made in mutual funds, fixed deposits, or buying a slice of ownership of companies in the form of stocks.
  3. Real estate – In this type of investment, you can invest your capital in buying property or invest in REITs for the long term to acquire your property.

The best investment option differs for every individual. These are some useful beginner investment tips. 

Analyze your style:

Are you investing to buy a house? or are you investing to pay off your student loan? Or are you doing investment for taxes? Your investment goals can be completely different from that of your friend. Hence, set a perfect goal. While setting the goal, consider your risk potential, time horizon, and your interest to learn the market. Likewise, choose the investment options based on your requirement. Some famous investments are tax-saving mutual funds, equity-linked saving schemes, debt mutual funds, stocks, FD’s, and NPS. If you are a full-time employee with only a little time to spare in a day, you can avail the help of certified advisors on investing platforms. If you are tech-savvy with a keen interest in graphs, you can start investing on your own after opening an investment account. 

Diversify your investment:

Investment is an adventurous ride. You might encounter sudden falls and mighty rises in your portfolio occasionally. Therefore, it is better to safeguard yourself from uncertainties. Diversification of investment simply means investing in different financial tools to minimize risks. A Gen Z with high-risk potential can invest a higher percentage of his budget in equity investments. This cannot be done by a senior citizen, considering the volatility in the market. You can diversify your asset allocation within sectors or in asset classes. Hence, diversification of investment is the key. 

Keeps your emotions in check:

Investing a budget can be intimidating for new investors. In the process of investing, you will encounter different market changes that can be often scary. Choosing the correct financial tool of investment and keeping up with the trend can seem to be a risky business to beginners. Though, historically investments have given good returns, the time horizon for getting good returns takes time. You might be tempted to sell your stocks during the slightest dips in markets. This might hinder your long-term investment goals. Instead of astounding with the market, stay calm and track your portfolio only at regular intervals of time. This will save you from ruining the surprises of investments over the long term. 

Construct a defined investment strategy: 

An investment strategy is simply determining your day-to-day activity in the market. You can be an active investor, buying and selling stocks and mutual funds based on the market trends regularly. On the other hand, you can be a passive investor with an initial investment in certain instruments. This is usually a “buy and hold” approach with a long-term investment strategy. However, as a beginner, it is better to test the waters before testing your luck.

Get a good financial advisor:

The availability of plenty of financial instruments and complex technical terms can be exhausting for a beginner to choose from. You can always get help from certified financial investors through your investing platform for commission. They can summarize the market reports, advise you on your investment plans, and will help you to take advantage of tax strategies. However, there are a lot of nonprofessional “investment advice providers” in the market. Investment is not a gamble, and you cannot rely on amateur tippers in investing your hard-earned money. A certified professional can suggest your investment plans and share market investment tips. In a world where we pay delivery and packing charges more than the food cost, we should not complain about the minimal commission paid to manage our wealth. Because they say, “if you are good at something, never do it for free”.

Bottom line:

The one mantra for a successful investment journey is “Invest early and invest regularly”. The power of compounding can do wonders to your regular modest investments. Never hesitate to ask for help because even the great Alexander needed his Olympias to reach his greatness.


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