Investing in Stock Market is the most eye-catching investment options. Investing in stock market is risky. If done without proper research can result in loss of funds and if done smartly can multiply your funds. People make lots of mistakes in their investing in stocks. Here are some rules of successful Investing, if you get our service “INVEST” we assured you will never lose money in long term
“Mutual Fund Sahi Hai” is a advertisement concept that we see now-a-days when it comes to investing in mutual fund. But before judging this statement it is important to understand the concept of investing. This article will throw light upon why rules should be considered for successful investing
CLEAR INVESTMENT OBJECTIVE:
Before indulging in investment, it is advised to set the objectives steer clear. If there is need for short term investment to buy bike or car, or medium term investment for education purpose or long term investment such as retirement plan. It is always better to work and think according to the objectives laid by the investor for maximum growth.
GOAL BASED INVESTMENT:
Investment is a broader concept and can depend upon the need of the investor. Goal oriented investment is a methodology where an investor knows the purpose of money invested in particular scheme. Examples such as Retirement funds and Children’s funds can provide stable return with a minimum invested amount.
“Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years.” –Warren Buffett. Warren Buffett says that money is not growing overnight. “It doesn’t matter how great the talent or efforts are, it takes time for some things. By getting nine women pregnant, you can’t make a child in a month.” By considering longer term goals, your investment planning should be performed.
Balancing portfolio is always important when it comes to investing. Suppose a person wants to invest 50,000 in stock market, he/she should be invest in large cap, mid-cap and small cap. He can choose a combination of equity for 3-5 years period to balance the risk. If you want to invest for long term in equity market get our INVEST service.
Time is considered to be one of the most important factors while planning to invest. If a person is willing to invest for a horizon of less than 5-6 years then he/she should not invest in equity. Also, he should invest in money market instruments and liquid funds.
BALANCE BETWEEN RISK AND RETURN:
Risk and Return combination is the need of the hour. An investor should check whether his/her risk and return matrix is fruitful or not. The equilibrium level will help him/her to understand whether the risk taken is in accordance with the return expected out of the schemes suitable for growth.
UNDERSTAND THE ULTIMATE POWER OF COMPOUNDING:
As an investor, you may gain when the value of each unit of investment goes up. When you make investment over a long period of time, the benefit of compounding helps in growth of investment. It is nothing but the interest earned on interest. It is said that the earlier you start investing the greater will be the power of compounding. Example, if you invest 5,000 @10% for a period of 5 years (one time) your corpus will grow to 8,053.If the time span increases to 15 years, the corpus will increase to 20,886.
NEED FOR RISK PROFILING:
Various Stocks have different levels of risk. Similarly, there are differences between investors with respect to the levels of risk they are comfortable with (risk appetite). At times there are also differences between the level of risk the investors think they are comfortable with, and the level of risk they ought to be comfortable with.
On a concluding note, I would recommend to follow these rules for a smooth and successful investing career.#happyinvesting