Skip to main content

Investment Strategy: If you have the appetite for risk...

Some good options if you have a high-risk appetite

Everybody should start their financial planning as early as possible in life. There are many facets of financial planning. These include inflow and outflow of money, planning for increase in income and expenditures, saving for future needs etc. Keeping track of inflows and outflows of money helps in maintaining financial discipline.

People save a percentage of their inflows to cater their future needs - investments. There are many investment instruments available in the market and it's important for investors to understand the various offerings, requirements, and limitations of an instrument, before entering into it. Some of these investment instruments (equity or market based) offer much higher returns than traditional instruments. However, investing in these instruments is risky as they do not guarantee the principal amount. Since the future needs are also variable in nature (some known and others unknown), it is better to create a portfolio of investment instruments by investing in multiple options.

First of all, a first-time investor should understand his risk profile. The risk profile of an investor depends on various factors such as age, earning visibility, family background, earning members in the family, number of dependents in the family etc. Basically, it is the ability to bear a partial loss of the principal amount in bad market conditions, such as the current market conditions. The risk profile of an investor is unique to him. Also, the risk profile keeps changing as and when these factors change with time.

Here are some instruments an investor with a higher risk profile can include in his portfolio:

Equity

Historically, it is proven that equity investments give higher returns than any other market instruments over the long term. However, the key to success in the stock markets is timing, patience and regular market tracking. There are large-cap (well-known) stocks, mid-cap stocks and small-cap stocks in the market. Investors with a high risk appetite can invest in mid-cap stocks that offer a higher risk-reward ratio.

Factors to watch before making investment decisions in them include financial track record of company, macroeconomic business outlook of the sector, management's track record and liquidity in the market. Investors should stay away from small cap stocks as the information available about these stocks is not much.

Small-cap and mid-cap funds

These mutual fund schemes focus on investments in small-cap and mid-cap stocks. Those who do not have the time to track the markets regularly or do not have good market knowledge can look at investing in these funds. Usually, in bad market conditions, these stocks under-perform their peers focused on large-cap stocks, but in good market conditions they do well. It is a good time to invest in such funds as the markets have corrected quite a bit over the last one year and the possibility of further downsides is limited.

Portfolio investment services

High net worth investors can choose from the portfolio investment services provided by many financial and brokerage houses. A fund manager of aggressive schemes invests in private equity and venture capital funds with a high risk-reward ratio.

Popular posts from this blog

NPS for Tax Saving

The NPS is a great way to save tax if you don't mind locking in your money till you retire. Till last year, the taxability of the NPS was a big issue. But last year's Budget changed the rules and made 40% of the corpus tax free. The PFRDA wants that the balance 60% to be exempt from tax as well. The emphasis is on increasing pension coverage. So, allowing EEE status (to NPS ) is our major demand (in the Budget NPS is especially useful for investors who may have exhausted the `1.5 lakh investment limit under Section 80C but want to save more.   Another way the NPS can cut tax is by rejigging the salary.If a company deposits up to 10% of the basic salary of an employee in the NPS under Section 80CCD(2d), the amount will be tax free. Turn to page 28 to see how much tax this can save. However, the take-home pay of the employee will come down. Invest Rs 1,50,000 and Save Tax upto Rs 46,350 under Section 80C. Get Great Returns by Investing in Best Performing ELSS Funds Top 10 Tax...

Retirement planning from a long-term perspective

Invest In Tax Saving Mutual Funds Online Download Tax Saving Mutual Fund Application Forms Buy Gold Mutual Funds     `HOW green was my valley'. This title comes from a movie I had watched many years ago. A little boy's journey into adulthood and the story of a Welsh valley's turn of-the-century descent from pristine paradise to despoiled coal mining.   I thought of the title because it is comparatively reflective of a person's life ­ the glorious years when he is earning and the sun down years when he is not having his regular job and, hence, his living standards comes down. The reason is a combination of things. Inflation of food items, transport, increase in health related costs in the later years of life and increase in expenses in almost all basic amenities of life. In India, the social security system is almost non-existent. In some states, wherever it is available, the scales of benefits are extremely modest...

BHIM App

What is BHIM? BHIM stands for Bharat Interface for Money , which is an easy way of transferring money from one bank account to an other via a smartphone using the Unified Payments Interface (UPI) platform . It is an instant payments application meant for sending money as well as requesting for payments. How is it different from UPI? BHIM is no different than UPI. But in the case of BHIM, customers don't have to download mobile applications of multiple banks, instead a single BHIM app downloaded from Android Play Store is sufficient. Other than that, payments can be made through a virtual payments ID or through account number and IFS code, same as UPI. What you need to use BHIM? BHIM can be used across an droid smartphones with version 4.0 and above, also it will be made available on iPhones and Windows smartphones very soon. Further, for feature phone users they need to use the USSD feature by dial ing *99#. Why was the need for BHIM felt when UPI is already in place? With various...

SBI Long Term Advantage Fund Series

Invest Rs 1,50,000 and Save Tax upto Rs 46,350 under Section 80C. Get Great Returns by Investing in Best Performing ELSS Funds Top 10 Tax Saver Mutual Funds for 2017 - 2018 Best 10 ELSS Mutual Funds to invest in India for 2017 1. DSP BlackRock Tax Saver Fund 2. Invesco India Tax Plan 3. Tata India Tax Savings Fund 4. ICICI Prudential Long Term Equity Fund 5. Birla Sun Life Tax Relief 96 6. Franklin India TaxShield  7. Reliance Tax Saver (ELSS) Fund 8. BNP Paribas Long Term Equity Fund 9. Axis Tax Saver Fund 10. Birla Sun Life Tax Plan Invest in Best Performing 2017 Tax Saver Mutual Funds Online Invest Best Tax Saver Mutual Funds Online Download Top Tax Saver Mutual Funds  Application Forms For further information contact  SaveTaxGetRich on 94 8300 8300 ------------------------------ ------ Leave your comment with mail ID and we will answer them OR You can write to us at Invest [at] SaveTaxGetRich [dot] Com OR Call us on 94 8300 8300  

BANK FDs for Tax Saving

This is probably the easiest way to save tax if you have a Netbanking account . After the demonetisation and the digital push, almost everyone has one. A few clicks of the mouse and your tax planning is done. However, as mentioned earlier, this convenience comes at a very high cost. Interest rates have come down significantly and are close to 7-7.5% right now. The bigger problem is that the interest is fully taxable. It is added to the income of the investor and taxed at the marginal rate applicable to him. In the highest 30% tax bracket , the post-tax yield is close to 5%. Even so, tax-saving fixed deposits are suitable for risk averse investors, especially senior citizens who might already have hit the ` 15 lakh ceiling in the Senior Citizens' Saving Scheme and don't want to lock in money for the long term in a PPF account . Though NSCs offer higher rates than most banks, many senior citizens prefer to invest in deposits of their own banks, because they get better service ...
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