According to an article in The Hindustan Times in early 2015, there has finally been a predominant trend of household savings in India being funneled towards financial assets instead of physical ones, like gold and property. Experts believe that this is indeed smart money management, since physical assets are no longer providing handsome returns. If you are starting off with investing, the focus should be on mutual fund investments perhaps. We look at some guidelines to follow for first time investors.
Starting off with Investments: Here are Some Options to Consider
Some top investment choices for beginners include:
- Stocks: When choosing stocks for investment purposes, beginners should consider
seasoned one that have been stable for a period of time. Primarily, these
stocks would be the ones belonging to the more established companies, dealing
in goods of everyday needs, the demand for which would be sustained despite the
economic scenario. For instance, stocks of companies dealing in food items,
cleaning agents or personal care items must be considered. These stocks have
the ability to rise fast. Therefore, you need to buy when their prices drop and
consider selling when prices seem to have peaked. This can help you make
profits and provide a boost to your investment plans.
- Certificates of Deposit: Financial
planning in India is incomplete without these risk free investment
instruments. Certificates of Deposit entail no risks; however, the returns are
fairly low. Besides, there are no quick gains here. You will need to keep your
money with the bank for a period of 6 months or more. The bank pays you back
with interest, which is not generally very high. If you want to be a seasoned
investor with CDs, you can choose three certificates with 1, 2 and 3 year
maturity periods, respectively. This way, you can periodically cash out on your
- Mutual Funds: These funds are ideal for beginners because they are managed by seasoned investment specialists. An experienced fund manager often succeeds in generating handsome returns for all investors who might have pumped in cash into a fund. Also, mutual fund investments can be started with a very nominal amount and hence easy to manage for beginners.
Above all, you will need an expert investment advisor for help and support. Choose an investment company that understands your needs as a beginner and provides suitable suggestions for building on your investments. The idea is to move from strength to strength and gain confidence as you gain grip on the investments. Your personal interests as well as your comfort levels should be given foremost importance when providing suggestions.
Above all, investments should begin with smart money management. You should start saving early and give yourself more time to build a corpus. Only then can investments reap the best rewards.