INSUBCONTINENT EXCLUSIVE:
As a beginner, the most valuable input is appropriate advice and investment guidance.Money lying idle in a bank account earns a nominal
Financial experts advise investors to park their wealth in schemes that offer higher returns
However, too many investment options available in the market may confuse many
One of the basic rules of investing is to start early so that time works in favour, say experts
As a beginner, the most valuable input is appropriate advice and investment guidance
People get their investments wrong just because they get their priorities and approach wrong, they add
"Even if you save a good portion of your salary, the value of your money will get eroded with time unless you fail to invest it well," said
Navin Chandani, chief business development officer, BankBazaar
Singh, head, advisory, Angel Broking, said, "The earlier you start, the longer you compound your money
your investmentsExperts also stress that anyone at the start of his or her career should consider having a thoroughly informed financial
It is vital that one builds a corpus for both the purposes over time, they add.According to Mr Chandani, the first step to any investment is
understanding how much you earn, how much you spend, and how much you can save
It is important to track the expenses and spending habits
"Make a list of mandatory expenses like rent, commuting, food, etc., and draw up a budget
Try to stick to this budget as much as possible," he said.Anil Rego, founder and CEO, Right Horizons, echoed similar views
"Invest what you can afford
Target an amount you can save and ensure regular investment
Buy only what you believe in
Don't invest because your friend or a family member is doing it
Understand why you want to invest," he said.Where should you investThere are several investment options available in the market for
However, financial advisors say that the best way to start an investment is through a Systematic Investment Plan (SIP)
An SIP allows the investor to capitalise a certain sum of money periodically in a mutual fund (MF) for a specific period.According to Mr
Chandani, one can invest in equity and debt funds via an SIP, depending on the portfolio and risk appetite
"SIP operates similar to a recurring deposit
However, unlike RDs which are debt instruments, SIP returns are linked to mutual funds, and therefore, the market performance," he said."As
a beginner, there is a limit to the investing capacity
That is addressed by mutual funds since you can diversify your risk even with small investments," said Mr Singh of Angel Broking
"Mutual funds offer a wide choice of investments with a small investment
For example, you can start a SIP with as low as Rs 500 per month and take indirect exposure to equities, indices, government bonds,
corporate bonds, gold etc."Some experts believe investment in equities is also a good bet for investors
"The sectors which are outperforming the key benchmark index or have the tendency to outperform should have more weightage in the portfolio
To Invest In Gold Here's All You Need To Know)The portfolio must consist of stocks which have a competitive advantage over their peer
groups and have the tendency to generate better value and return
"As a new investor one should invest in blue chip companies which are relatively safer and have consistent earnings and dividend record
Stocks like COLPAL, HUL, Asian Paints can be considered as good bets for long-term investment," said Mr Ashar.Equity can help in getting
sufficient growth in the portfolio
The chances of loss in capital invested for an investment horizon of 3-5 years is extremely low, he added."Investors can park their funds in
equity market where there can be high risk in the short term due to volatility in the market but in a long term of say 15-20 years, the
investment can multiply 10 to 15 times based on the market conditions
Equity as an asset class can provide good returns of 12-15 per cent in the long term," said Raghvendra Nath, MD at Ladderup Wealth
Management."If the investment horizon for an investor is short term, then he may simply start with recurring or fixed deposits in a bank,"
he added.However, some analysts believe that beginners should focus more on long-term goals.The biggest risk for beginners is investing
without understanding the investment product
"Investors generally get swayed by the tall returns promised by the investment product," said Rahul Jain, head, personal wealth advisory,
he adds."Making short-term investments is a risky business and involves plenty of research and trade market education before opting for
them," said Rachit Chawla, founder and CEO, Finway
"On the other hand, comparatively long-term options offer more easier and safer investment plans to stick with," he said.
