Skip to main content

What affects Investment Returns

Best SIP Funds Online 

There are five key factors that determine the general rate of return you can expect on your investments:

1) Your investment objective
2) Your age and financial responsibilities
3) Your liquidity (availability of funds)
4) Your risk-bearing capacity
5) Your investment timeline

First, you should have a clear objective before investing your money. The objective could be for the ultimate goal of a property purchase, children's education and marriage, retirement planning and so on. It could also be a near-term objective of saving for a foreign trip, or buying a bike. Once you have an idea of that objective, then some of the other factors will fall into place in guiding your investment decisions. Second, your age and financial responsibility play a vital role in any investment decisions. By and large, investment at a young age is beneficial to your long-term financial health as youngsters usually have fewer financial responsibilities such as spouses, children or retired parents under their care. Furthermore, it's never a bad idea to start building your financial knowledge earlier on in life, but it's no sin if you didn't —even if you are further along in life, organising your financial future can still pay off handsomely over the years to come. Third, your availability of funds is an important consideration. If you have debts to pay off (e.g., a car or home loan), you may face obstacles in making regular investments. There's no problem at all with that; you don't want to be in the position of having a debt payment you can't meet because you put money in the stock market hoping for a quick gain but the market dropped. When making investments, you need to determine how soon you will need the money, and if you have available cash lying idle, it pays to think about how best to deploy that.

With that in mind, one of the most critical factors next affecting investment decisions is your risk-taking ability. An individual's risk-bearing capacity should be higher at a younger age— younger investors can take advantage of the power of compounding over the long-term and can withstand the swings of the market due to recessions or global crises. However, even at a younger age, if you determine that you'll need your funds very soon, it's generally not advisable to put money in the stock market. So the old investment advice of 'higher risk, higher return' is something that all investors should heed before they invest—in your younger years, you can accept more volatility by way of the stock market with the prospect of higher long-term rewards.

All of this flows into the final point, namely, that the timeline of your investment is the fifth important factor in determining your investment return goals. If you think you will need funds very soon, it's extremely risky to put those funds in the stock market, as markets can swing heavily in either direction on virtually any news, whether or not it is relevant to the stocks in which you're invested. Now in India, fixed deposits, gold and real estate are generally the most preferred investment options. However, if your timeline is such that you can think three plus years ahead (ideally five or more), equity investments have the potential to generate very good returns. Unfortunately, it seems that Indian investors could be better informed about the investment opportunities in the stock market.




SIPs are when Stock Market is high volatile. Invest in Best Mutual Fund SIPs and get good returns over a period of time. Know Top SIP Funds to Invest Save Tax Get Rich

For further information on Top SIP Mutual Funds contact Save Tax Get Rich on 94 8300 8300

OR

You can write to us at

Invest [at] SaveTaxGetRich [dot] Com

Popular posts from this blog

Am you Required to E-file Tax Return?

Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Buy Gold Mutual Funds Leave a missed Call on 94 8300 8300   Am I Required to 'E-file' My Return? Yes, under the law you are required to e-file your return if your income for the year is Rs. 500,000 or more. Even if you are not required to e-file your return, it is advisable to do so for the following benefits: i) E-filing is environment friendly. ii) E-filing ensures certain validations before the return is filed. Therefore, e-returns are more accurate than the paper returns. iii) E-returns are processed faster than the paper returns. iv) E-filing can be done from the comfort of home/office and you do not have to stand in queue to e-file. v) E-returns can be accessed anytime from the tax department's e-filing portal. For further information contact Prajna Capit...

IDFC - Long term infrastructure bonds - Tranche 2

IDFC - Long term infrastructure bonds What are infrastructure bonds? In 2010, the government introduced a new section 80CCF under the Income Tax Act, 1961 (" Income Tax Act ") to provide for income tax deductions for subscription to long-term infrastructure bonds and pursuant to that the Central Board of Direct Taxes passed Notification No. 48/2010/F.No.149/84/2010-SO(TPL) dated July 9, 2010. These long term infrastructure bonds offer an additional window of tax deduction of investments up to Rs. 20,000 for the financial year 2010-11. This deduction is over and above the Rs 1 lakh deduction available under sections 80C, 80CCC and 80CCD read with section 80CCE of the Income Tax Act. Infrastructure bonds help in intermediating the retail investor's savings into infrastructure sector directly. Long term infrastructure Bonds by IDFC IDFC issued an earlier tranche of these long term infrastructure bonds on November 12, 2010. This is the second public issue of long-te...

Section 80CCD

Top SIP Funds Online   Income tax deduction under section 80CCD Under Income Tax, TaxPayers have the benefit of claiming several deductions. Out of the deduction avenues, Section 80CCD provides t axpayer deductions against investments made in specific sector s. Under Section 80CCD, an assessee is eligible to claim deductions against the contributions made to the National Pension Scheme or Atal Pension Yojana. Contributions made by an employer to National Pension Scheme are also eligible for deductions under the provisions of Section 80 CCD. In this article, we will take a look at the primary features of this section, the terms and conditions for claiming deductions, the eligibility to claim such deductions, and some of the commonly asked questions in this regard. There are two parts of Section 80CCD. Subsection 1 of this section refers to tax deductions for all assesses who are central government or state government employees, or self-employed or employed by any other employers. In...

ULIP Review: ProGrowth Super II

  If you are interested in a death cover that's just big enough, HDFC SL ProGrowth Super II is something worth a try. The beauty is it has something for everybody — you name the risk profile, the category is right up there. But do a SWOT analysis of the basket, and the gloss fades     HDFC SL ProGrowth Super II is a type-II unit-linked insurance plan ( ULIP ). Launched in September 2010, this is a small ticket-size scheme with multiple rider options and adequate death cover. It offers five investment options (funds) — one in each category of large-cap equity, mid-cap equity, balanced, debt and money market fund. COST STRUCTURE: ProGrowth Super II is reasonably priced, with the premium allocation charge lower than most others in the category. However, the scheme's mortality charge is almost 60% that of LIC mortality table for those investing early in life. This charge reduces with age. BENEFITS: Investors can choose a sum assured between 10-40 times the annualised premium...

Bharat Bond ETF

Top SIP Funds Online   The government of India has paved the way for the launch of India's first corporate bond ETF called as Bharat Bond ETF. Edelweiss Mutual Fund will be managing it. The fund is mandated to invest in AAA-rated bonds of select public sector companies (see the table 'List of constituents and their proportions in the portfolio'). The government has a threefold objective behind launching this product. One, to deepen the liquidity of the Indian debt markets and provide a gateway for easy retail participation. Two, to solve investors' dilemma of picking premium bonds. Lastly, to help the underlying government-owned companies raise funding for their operations. But does it make sense for you, the investor, to invest in it? Lets find out. What is the product? As the name suggests, it is an exchange-traded fund which will be listed on a stock exchange from where its units can be bought and sold post launch. It will have two variants - one maturing in 3 ye...
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now