Where Should First Time Investors Put Their Money On
Mumbai, October 23, 2021
A first-time investor may not always be a young investor. Investing can start at any age, but it is the financial goal, the risk appetite, and the time horizon that decides investment decisions. Here are a few things you need to keep in mind while putting your money into investments for the first time.
Financial plan – Your investments are a part of your larger financial plan. The size of your retirement corpus, your and your family’s life and health insurance, an emergency fund, etc., are subjects that you need to address before investing. Once you have your financial goal in place and life and health risks covered, you are good to go!
Decide on a portfolio – You can design an investment portfolio based on the time you have left for retirement, your willingness to take risks, and your financial goals. These factors will be unique for each investor. However, there are a few common asset categories to choose from, although the investment proportion in them will vary from investor to investor.
These asset categories include – Debts – If you are a salaried person, you are probably investing in a PF already. Others can open PPF or go for other debt instruments like NSC, ELSS, fixed deposits, etc. These instruments can help you save taxes and also give you a steady and assured return. However, too much investment in debt instruments will limit your growth, as you will not be able to participate in market growth.
Equities – Investments in stocks are closely linked to the economy. Your investments in shares will go through the ups and downs of the Indian economy, making it a riskier investment compared to debts.
However, as a developing economy, investment in the Indian stock market can yield high returns in the long run. A first-time investor should consider allocating a portion of investment in the equity market.
Mutual Funds – These are customized portfolios of assets, which can be in varying proportions of debt, equity, and commodities, depending on the mutual fund category. A first-time investor can open a SIP that will ensure regular investment in the mutual fund schemes of his or her choice.
Precious metals – Precious metals are an alternative investment option that holds great importance in Indian society. Gold, in particular, is a sought-after investment and is widely used for purposes like marriages and gifts. Gold is also considered to be a hedge against market uncertainties and inflation.
A new investor may not be aware of all the investment instruments available. Therefore, using well-selected mutual funds is a viable option to earn a handsome return from your investments. You can use the Tata Capital Moneyfy App to study and select the best-performing mutual funds in India. With your Moneyfy profile, you can open a SIP and make a resolute start to your investment journey.
(Disclaimer: This is branded content. Readers are advised to exercise due diligence and discretion before entering into any correspondence, investment, purchase, business dealings or any other decision on the basis of this content.)