Get to know whats is INVESTMENT

Before investing in any security have you ever thought what ‘investment’ actually is? Investment brings many benefits with it. Investment is the employment of funds with the aim of getting returns on it. It is a commitment of funds saving in current consumption with aim of getting some future benefits. Thus it is the reward for waiting for money. ‘’Idle money is not savings’’. Investment decisions and financial decisions interact with each other.

We earn money with hard work, patience and dedication but one slight mistake will bring all this money and effort in vain. Hence portfolio anaylisis is essential. Therefore, one should keep the following things in mind while investing:

Interest

People often say, you should always do what interests you. Hence when it comes to interest one should have self interest. As life is full of uncertainty, no one can reach the destination unless you are enjoying the thing you’re doing.

Numbers

As said earlier that investment is reward for waiting for money, numbers here play an important role as to how many and how much? One should be clear with how much to invest and how long to invest. This clarity is beneficial for future.

View

‘Regularity in work leads you to better future’ hence keeping this in mind one should view your investments regularly as it can help to ensure that you’re on track to meet your financial goals. Failing to regularly re-evaluate what you’re investing in and how those investments are performing could skid of the rail, where your goals are concerned.

Engaged

We invest with the view to grow money, hence we should be in contact or engaged with every activities, related to investment such as schemes, advises, period , amount

Schemes

The aim of income funds is to provide regular and steady income to investors. An investor is not only a sole person but he is also associated with his family,business and much more hence in order to eliminate excessive risk he needs to go with respective investing schemes according to his goal and future benefits.

Mental

They say if you are mentally prepared, you can do anything you want to do, hence an investor needs to be mentally prepared to accept and overcome all investment related risks, ‘’ as investments are subject to market risks.’’ unprepared mind leads to future problems. Hence a well mind is a free mind.

Examples

As mentioned earlier money is hard-earned, hence making a mistake will crumble down the efforts. Examples are set so that one could follow or learn from it, hence one should look at examples or advice of big and successful investor so that you are cautious about the stepping stones. For example: one can read examples set by famous investor, Warren Buffet and his ‘’pain-gain’’ journey.

Need

Every person has a certain goal or objective to achieve. Hence investment should be done keeping in mind future goals. You should invest looking at the need or else you will end up with no income in future.

Taxes

As we all look for profit tax, saving investments play an integral part in one’s life as they offer tax deduction. But while choosing a right tax-saving investment one should keep in mind the factors like safety and returns.

Mutual Funds for First Time Investors

Mutual funds investment might be a little confusing at the beginning but it can result in a good amount of profits. Mutual funds do not mean investing only in stock markets.

What is a mutual fund?

An amount of money is collected from the investors in the form of stocks, bonds, or some other funds which are owned by them. These investments can be made in different areas like government bonds, or stocks from large companies, or even stocks from different countries. Buying a mutual fund means you are investing in something along with other investors. You can manage your fund daily then you can even decide if you want to buy more funds or sell some of the stocks. Your money in a mutual fund will be handled by a fund manager. A fund manager is a stock market expert who can handle your money like a professional.

When you invest money in one of the mutual fund schemes then the AMS (Asset Management Company) will allot units according to the NAV of the mutual fund. When you invest money you earn a certain amount of percent every year.

What do you need to consider before investing

Risk Level

Not all funds are safe to be invested. The mutual fund investments are not guaranteed and are not insured by the government. You can also lose money when investing through your bank’s name. So always check the level of risk before investing. The performance of the funds in the past will let you know about the amount of risk.

Buying and Selling Price

If you sell your funds for more than the actual buying price then you are making a profit. This in other words is known as a capital gain. When you sell your funds for a lesser price than the original value then it will result in Capital loss.

There are three kinds of mutual funds. You need to have enough knowledge about each of them before you start investing. This classification has been made on basis of the underlying assets.

Equity Mutual Funds

These are the type of funds that are invested in the stock markets. When you invest in large companies then it is known as large-cap mutual funds. When you invest in funds of middle-sized companies then it is known as Mid cap mutual funds. And the last one is the Small Cap mutual funds which are those funds when invested in the small sized company. Mutual funds can be classified into various sectors too. When one invests in one sector then it is known as thematic or sectoral mutual funds. You can choose the size of the company, the sector according to your investment horizon, risk level, the objective of the investment, and your preference.

Debt Mutual Funds

These funds are classified based on the tenure that is being lent and the borrower’s quality. The Short duration Mutual funds are the ones having a maturity that ranges from one to three years. For high securities and a low credit risk level, you can invest in Gilt mutual funds. The money you wanted will be invested in government securities. This might be a secure way.

Hybrid Mutual Funds:

This category comprises both equity funds and debt funds. They are further categorized based on the amount of money you invest. The proportion of your investment will determine whether your funds are debt-oriented balanced or hybrid funds, or if it is an equity-oriented balanced fund.

You have several options to choose from. You can invest according to your preference. All the mutual fund investments are under the Securities and Exchange Board of India which ensures that you have transparency over your funds in the market. Mutual funds are a good option for long term benefits. Get to know about each one and start investing.

Reasons You Should Start Investing Today

Investing is the act in which we allocate funds into various financial assets to place your money to figure and earn from the resultant income generated. Ideally, this will act as a secondary or, in some cases, primary income stream and assist you in fulfilling your financial goals. We mostly view only a few drawbacks that exist. Let’s not do this anymore. It is time to explore the opportunities the planet of investing has in-store for you. To start off with, let’s uncover the excellence between saving and investing.

Accomplish Financial Goals

We might be holding several counts of wishes, and financial goals wait to be fulfilled. All of them are often accomplished if you follow a disciplined investment path. Whether it’s a brief-term goal like buying a car, house, or future goal like retirement, the wedding of youngsters, you’ll achieve it all if you create suitable investments that align together with your objective and risk profile. For example: Say you would like to travel on a world tour.

But, unfortunately, your income cannot be accommodate that wish of yours. In such a case, a well-designed or planned and perfectly planned portfolio is going to be your wish-fulfilling fairy. Retirement, though a crucial part of life towards which one should be planning it is the least of our concern. But a prompt plan can keep you financially independent even after your retirement. You’ll not need to depend upon your children to require care of you. Instead, you’ll believe the investments which you built to buy you. Sounds good, right?

Good Investment Returns

Nowadays, even banks seem to be risky, with the number of defaults increasing. But the danger is when you buy the reward. If you would like to win the race, you want first to run it. So expecting a return without taking a risk is absurd. But you are choosing an area that provides you with the proper return for the danger that you take is essential. Banks pay an annual return of roughly 4-6% on your money. But once you make the proper investments, you’ll quickly make a 10 to 18% return on your capital. But, the return might vary on various factors.

Win over inflation

Inflation is one of the crucial reasons why one should invest. As per the estimates, the annual inflation in India exceeds 5%, but where the food and medical inflation is approximately 9.8% and 5 %, respectively. Hence, the returns from your bank account won’t assist you in combating the raging prices. You’ll need a simpler tool. Stock markets are known to offer a mean annual return exceeding 12%. So, you’ll not only be ready to win inflation but left with extra cash to shop for a replacement car.

Tax benefits

Another indisputable fact that will make investments attractive is the tax benefits received. A way to encourage people to form assets, the government offers various tax rebates. You’ll reduce the tax you’ll need to pay using schemes like ELSS, section 80C, etc. Thus, investing allows you to realize two goals at round. Hence, you’ll not need to spend your hard-earned money paying up all of your taxes. Instead, you’ll double them up legally by investing in your preferred asset class.

Being a Shareholder

XYZ company features a beautiful concept that would shape the longer term. But unfortunately, they lack the funds to satisfy it. So by investing, you’re giving them a chance to urge their business on the trail of growth. On the opposite hand, you’ll not only own a part within the industry but even be entitled to the profits. Thus, you’ll own a part of your favorite company of something bigger and better. Hence, you’ll be a part of someone’s dream while getting some attractive returns. So, you’ll be ready to hit two birds at round.