It is the innate desire of the people to invest in the best scheme that offers maximum returns with less risk. But, a lot of people hesitate to take their first step towards investment because of several reasons. In this write-up, we list down a few important on how to make yourself investment-ready.
It is said that ‘knowledge is power’ and it holds great significance for aspiring investors. In India, a lot of people wish to invest in different schemes but have many apprehensions; they fear that they may not generate expected returns, or they may lose their money. One of the critical reasons for this apprehension is the lack of knowledge about the investment market. Not many people understand what they must do before investing in the different schemes or what investment scheme should they choose.
Know your options
One of the most important things about getting to invest ready is first to know the options available. Do you ever go shopping without knowing what to buy? The same logic applies to investment too. You must first know about the various options available, read about the different investment schemes and determine which of these options suit your needs. Once you zero down on your options, try to understand more details of the investment. This information will help you make an informed investment decision.
Determine your risk-taking ability
You must have heard the disclaimer, ‘investments are subject to market risks, read the offer documents carefully.’ It is true that all investment schemes that depend on the market performance to generate returns. Hence, it is paramount that you assess your risk-taking capacity and choose the investment plan carefully. If you are willing to take moderate to high risk, you can choose to invest in equity mutual funds or other equity-related schemes. While these schemes have high risk, they also provide higher returns. Whereas, if you don’t want to take any risk at all, it is better to invest in traditional schemes like bank FD, PPF, etc.
Aim for diversity
You may have heard several experts say, ‘don’t put all your eggs in the same basket,’ what they essentially mean is that you must not invest all your money in a single investment scheme or a similar scheme. Instead, you must aim to diversify your portfolio by investing a small amount in different types of investment schemes based on your risk profile, and the maturity of the scheme. This will not only help you spread the overall risk but also helps you get better returns.
Be aware of the terms and conditions
When it comes to money matters, you would surely want everything to be planned and avoid any unpleasant surprises. When you invest a certain amount, a part of the investment goes for paying the additional charges that you may not be aware of and you may feel cheated. You should read the terms and conditions of the scheme carefully and understand the features, charges involved, etc.
Know when to exit, hold or reallocate
Investment is not just about choosing the right scheme. To be successful, and gain valuable returns, you must be on top of the schemes and review its performance from time to time. This not only helps you understand if you are on track to accomplish your goals but also allows you to take timely decisions to rebalance your portfolio and avoid incurring any significant loss.
Thus, having the right and complete knowledge of the various schemes is pivotal to be investment ready and be successful at it. Also, don’t forget to take help from experts as and when needed to make the right investment choice.