New to investments? Dont Skip Reading this!
If you’re new to the investment world, it can be a little daunting. There are so many investment options available in India, and it’s hard to know where to start.
In this blog post, we will explain the basics of investment planning and give you an overview of the different types of investment options available in India. We’ll also provide some tips on how to choose the right investment plan for your needs.
So whether you’re just starting or you’re looking for a new investment option, read on!
When it comes to investment planning, there are two key factors to keep in mind:
- your investment goals
- your risk profile.
Your investment goals will determine the type of investment plan you need, while your risk profile will help you decide how much risk you’re comfortable with.
Investing should never be a haphazard decision. New investors often ask how much they should save or what percentage of their income they should Invest.
The answer to this question depends on many factors like goals, lifestyle, etc. However, there is a thumb rule which suggests that you should invest around 20% of your income for long-term financial goals.
Lets understand which characteristics distinguish an excellent investment opportunity?
A savings plan’s efficiency can be measured by a variety of characteristics, including its flexibility in investing, pre-withdrawal, and the amount of tax exemption it enables.
If you make a list of the criteria that most investors consider, you’ll find that they are influenced by the following factors –
- The ability to invest and withdraw funds at any moment – As an investor, you should have the flexibility to invest or withdraw at any time as it is your hard-earned money. Given the volatile nature of the market, investing in a bad scheme will get your money stuck.
- Ability to invest any amount of money – Keep in mind to check for such limitations, for any investor his primary goal is to amass wealth and retire rich. A cap on investment means it restricts your financial growth.
For example – PPF allows you to invest only 1.5 lac per year. So it advised having a small exposure to such plans.
- A more secure risk-reward proposition – Any long or short-term investment plan should offer a good risk to reward ratio. The reward should be higher with the risk being considerably lower. This parameter should be crucial in selecting various investment options.
- Individualized investment time – There is a lot of variety right from short-term investment plans to long-term plans. There should not be lock-in periods. As an investor, the plans should offer you custom investment time.
- Tax advantages – A good investment option will bring decent tax benefits with it. Schemes like PPF, NPS, ULIPs provide you with saving tax under sec 80C.
So whether you’re just getting started with investments or looking for new investment options, read on!
This investment guide will provide an overview of the different types of investment options in India, especially short term investment plans and help you understand how to choose the right investment plan for your needs.
There is a variety of investment options available in India, lets quickly understand them:
Equity investment plans:
- These are investment plans that invest in stocks and shares. Equity investment plans can be volatile, but they offer the potential for high returns. If you’re comfortable with a higher level of risk, an equity investment plan may be right for you.
- To begin investing, you’ll need a bank account and a Demat account. If you want to continuously invest and profit from stock investing, you must have a high investment risk appetite.
- You can invest using your research or guidance from a qualified broker if you have a good understanding of how equity stocks and markets work.
Debt investment plans:
- These are investment plans that invest in bonds and fixed income securities.
- Debt investment plans tend to be less volatile than equity investment plans, but they also offer lower returns. If you’re looking for a more stable investment option, a debt investment plan may be right for you.
- The money is put into fixed income instruments including government and corporate bonds, debentures, and other long-term fixed income securities in Debt Funds.
- Debt funds can have a wide range of risk profiles depending on the securities they hold in their portfolio.
- Before investing, you should verify the ratings of the securities owned by the fund to determine the risk.
Gold investment plans:
- Gold is one of the popular investment options for investors looking for a haven asset. Gold prices can be volatile, but in India, including they have a history of rising over time. If you’re looking for an investment option that offers stability and the potential for growth, a gold investment plan may be right for you.
- Gold ETFs are getting increasingly popular these days. These are referred to as ‘paper gold.’ ETFs that invest in gold stocks and assets are known as gold ETFs.
- Unlike pricey gold, these can be purchased from the stock market according to your financial ability.
Real estate investment plans:
- These are investment plans that invest in property. Real estate investment plans can be volatile, but they offer the potential for high returns. If you’re comfortable with a higher level of risk, a real estate investment plan may be right for you.
- Real estate investing can provide you with both regular and capital gain income.
- Nowadays you can invest in REITs. These plans are good for anyone looking to diversify his portfolio and take advantage of Real estate.
Conclusion:
When choosing an investment plan, it’s important to consider your goals and your risk profile. Once you’ve done that, you can compare different investment options to see which one is right for you.