“The stock market is a device for transferring money from the impatient to the patient.”
-Warren Buffett
Your investment portfolio should consist of those products that match your needs and work towards your financial goals. Investment is a must these days. Because investments allow an individual to create a corpus, but they also enable us to earn a good return on the savings and can even generate regular income if done right. If you are a first-time investor or have been in the investment game for a while, you should consider these points and that will surely help you in your investment tactics and will also maximize your long term returns.
Mentioned below are the few factors that can help you find the right type of investment:
1. Understanding your financial product
There are a variety of financial products and its essential that we should consider risk appetite, tenure, and investment nature before investing. It’s important to understand these products before adding them to the portfolio. Making sure of the complexity of the products will ensure that you meet your financial plan, and also proves high profitability. It would help if you analyzed these factors before investing, and those which suit your age, financial condition, risk profile, and goals
2. Lacking in financial literacy
Many people often get confused while they are investing, and the reason behind this is that they don’t understand market conditions. One should intensely follow the market carefully and should also identify trends and patterns of investment. The major problem faced by the investor is to lack basic financial literacy, and they do not know the effects of critical economic factors of investment. Most people have less knowledge of risk, interest, and inflation. The simple mantra is to seek help if you lack sufficient knowledge. You can either Google it or get financial advice or even reach out to your fund manager if you have invested earlier.
3. Risk tolerance
According to financial expert, there is a direct correlation between the risk associated with an investment and the returns provided. Generally, the higher the risk, the higher the returns. However, different investors have different risk-taking ability, according to their financial condition and preference. It is essential to know your risk-taking ability. High-risk investments include equity investments, but one cannot assure the returns. Hence it is recommended to have a mix of both equity and debt in your investments.
4. Age
One of the most important factors to consider while investing is your age. Because when it comes to investing, your age factor plays a significant role. To invest while you are young is an advantage because you have disposable income, and you can wait for a more extended period for an investment to bear fruit. However, as you grow old, you have the responsibility of the family, children’s education fees, marriage, and many more. So you will have lesser time for your investment to provide returns. So your ideal investment instrument changes according to your age.
5. Long term perspectives
Remember one thing we are investors and not traders. Investments should be made in such a way that they help you out in the long run, and your investment should also beat inflation rates. You need to be mentally prepared and not expect results to appear instantly. The best way to reap benefits from your investments is to stay invested for an extended period. Say supposing your investment tenure is six years then you must not be tempted to withdraw your returns before 4.5 – 5 years at least. Remember, the market fluctuates, and this rise and fall of prices tend to average out given a long enough period.
Investment cannot be mastered in a single day. Remember one thing before investing and that is we are investors not traders. The fact is returned cannot be avoided in a single day and a consistent and cautious approach is the best way to guarantee returns in the long run.
Wondering how to invest online?
Invest through Fisdom India’s most trusted app for Direct Plan Mutual Funds. Here are its features:
- Zero Commission and Zero Fees
Where you can invest in a Mutual Fund on Fisdom for free. You don’t have to pay any commission or fees while you are investing your funds into a mutual fund. - Portfolio Rebalancing
Get your risk covered by periodically balancing your portfolio to maximize your returns. - Smart Recommendation Engine
Fisdom ‘s engine recommends funds that have outperformed the market based on scientific, financial models & historical market data. - Insta Switch
Switch your regular funds to direct in a few clicks, and get superior returns (1.5% more returns) for your investments. - Advance research and reports
With this feature, you get access to superior, advance, and smart fund reports. - Portfolio alters on the go
Fisdom helps you to remain in touch with your portfolio, and make wise decisions with portfolio alerts.
Are investments made on Fisdom safe?
Hesitating to invest with Fisdom ? Don’t worry, investing with Fisdom is 100% safe and secure because:
- 256-bit secure socket layer (SSL)
- All payments are routed via BillDesk.
- All orders are executed via the Bombay Stock Exchange (BSC)
- Fisdom is a SEBI registered investment advisor. (INA200005323).
So investing in a mutual fund is safe. Visit Fisdom and start building your portfolio today. Education, awareness, and good judgment can ensure that your investment journey with mutual funds can be fruitful and productive.
