Smart Investment Tips for Smarter Returns

” Risk comes from not knowing what you are doing. So, make Smart Investments and reap financial benefits.”

Investing is one of the most important things you’ll ever do with your money. And it isn’t just for the wealthy ones. If you have few thousand rupees that you don’t need right now, investing it can give you handsome returns.

But as beginners who have just started earning it can be an intimidating process. Still, the basics of investing for beginners aren’t as complicated as you might think. Here are some simple but smart investment tips that will make beginners comfortable in the world of investment. Once you follow them religiously, you can even create a strong foundation as a smart investor. Also, smart investment tips are important for personal financial planning.

Take the first step of ‘Starting Now’

Remember how in our childhood, we use to save our pocket money inside our books, diaries or in those tiny piggy banks just to get our hands to some fancy items we use to admire as children. So, if you are already aware of the concept of saving little for bigger joys, what’s the stopping? As a matter of fact, you’re never too young to start putting away a small amount monthly.
Once you start earning, plan out a budget and figure out how much you can invest every month. The longer you invest for; the more money you’re going to make. —Power of compounding. Yes, this was one smart investment tip.

Take the next step of ‘Seeking Help’

Once you figure out a budget, find out your options. Valuable tips from a closely related acquaintance do help but for expert opinion you may speak to an investment advisor at your bank. He or she can guide you professionally.

For instance, whether you should open up a tax-free savings account or invest in your registered retirement savings plan. Once you understand all the different types of accounts, the pros and cons, then you will be more confident and well versed with what you need and what you don’t.

Jump to the step of ‘Start Investing’

Now as a beginner, you will be little skeptical, no doubt about that. So, you can start with low risk investment like fixed deposits. These investments are loans to companies or governments and these provide modest but reliable returns. There’s an alternative way of investing too. If you focus on stocks that tend to be less volatile than the overall market, you can get specialized exposure to stocks that have promising long-term prospects.

For example, consumer staples stocks are generally perceived as being safer than the overall market, because even in tough economic times, people still need products supplies like food, clothing etc. The trick is to follow the lower-risk strategy which is a smart method of investing for beginners. In a matter of months, you will realize that these smart investment tips are helping you in saving smartly.

Try one stop solution for all your Investment Problems: SIP

Now, when It comes to smart Investment, one of the best ways to go about is to opt for SIP, that is, Systematic Investment Planning, which allows you to invest in mutual funds without any risks of market failure because of the Rupee Cost Averaging method where you buy more units when the markets are low, which reduces the total cost of Investment.SIP is a smart and hassle-free mode for investing money as it lets you invest a certain amount of money at a regular interval, which could be weekly, monthly or quarterly.

There are various benefits of Investing in SIP-

You can start with the minimum amount of 500. Also, the power of compounding plays an impressive role in increasing your money tenfold. And you get better long-term benefits.And, investing in FD (Fixed Deposit) or RD (Recurring Deposit) are good, safe choices but if you’re looking for 2X higher returns without market risk, then Systematic Investment Planning is for you.
It’s convenient because in SIP you won’t have to remember to make an investment every single week or month, like you do in all the other investments. With SIP, a fixed amount is deducted from your saving account every month automatically and is directed towards the mutual fund scheme you want to invest in.

Next step is to ‘Pick Up & Split’

It is almost impossible to pick the right time for investment but you can improve your chances of maximizing your returns by drip-feeding your money into a fund on a regular basis, for example once a month, rather than investing a lump sum in one go. You can buy fewer shares if you catch the market when it is rising but you can buy more at cheaper prices if it is falling, averaging out the overall cost and risk.
Also, never ever make the mistake of putting everything into one basket. If you funnel all your hard-earned cash into shares in one company and the company tanks, you will lose it all. The idea is to ‘diversify’, which involves dividing up your lump sum across a portfolio and investing portions into varied companies, asset classes or global markets. Always remember that investors who follow smart investment tips, stick to monthly investment plans.

The last step is ‘To be informed’

Information is essential when you start investing. So, it is advisable to be involved always. Investment options like bank deposits, debt funds etc. are not so information sensitive. As we discussed earlier, these options are safe investment vehicles. While stocks, real estate, equity linked mutual fund are relatively riskier form of investment.
That makes their rate of returns also higher. But before one selects a high return option, it is important to learn to manage the risk of loss. In order to manage the risk, you must be informed. While investing in shares, information is one of the strongest powers. You can completely eliminate losses only by staying informed.

If investment is done consistently with purpose, it will always help you gain the desired result. Investment is a powerful tool that can make one a millionaire, if followed properly. So, take one step at a time to secure your future steps of life.
For more details, you can write to our financial fitness expert, Rishi @ rashi.bhargava@sbsfin.com, she believes in hand holding the new investors and coach them in details about the Smart Investment Tips and then help them have time-bound financial goals.

Contact us for any queries regarding Smart Investment Tips for Smarter Returns feel free to write us, contact@sbsfin.com