5 Ways to Maintain a Balanced Investment Strategy
Investment of hard earned money is not a child’s play. The decision to make investment requires a proper research and understanding of the factors affecting the returns and risks involved in it. Before you start any investment, you should have a proper investment plan.
Devoting enough time in contemplating the goal of your investment, the term for which you will be investing and the rate of return you are expecting is crucial. To invest effectively and make the most out of your investment, consulting a financial advisor is a good option. To devise a balanced strategy you can begin with incorporating these 5 points in your strategy.
Research Investment Strategy
Market research of all the investment options that are available is of utmost importance. Get an understanding of various investment schemes and the offers that various banks and NFBCs (Non-Financial Bank Companies) provide. Basically, it is advisable to know and understand all existing investment schemes so that you can make an informed decision. This gives you the idea of current trends and offers available on different investments and the benefits they can drive. You can research on various aspects of each scheme such as:
- Where you will be investing and the application process of the scheme?
- Who provides the best plans for each scheme (banks or NBFCs)?
- What is the minimum amount of investment required?
- What are the rates of returns?
- Is the investment affected by market volatility? If yes then how much?
- What are the chances of long term profit?
Risk Tolerance and Long-term Investments
High risk investments are done when the goal is to increase wealth. Risky investments are those that are affected by market fluctuations i.e. great loss can be incurred during downfall of the market. These investments should be done according to your risk tolerance capacity. On the basis of your age, your goal of investment return and your attitude to cope with market fluctuation your risk tolerance capacity can be determined. If your investment plan can’t tolerate market risks, you can consider investing in no-risk investments like fixed deposits. Bajaj Finance provides high FD interest rates with up to 8.20% returns with several pre-approved offers which you can check out here. These long-term investments guarantee returns which make them low-risk options that are ideal for any non-aggressive investor.
Diverse Investments and Tangible Assets allocation
When you have a high capital to invest, you can invest in different schemes across various industries. Having a diverse portfolio can give you all benefits of investments like high returns, safe long term investments and effective risk management. To diversify your portfolio you can invest in certain schemes like stocks, funds and bonds that involve market risk. Similarly, invest in safer investments schemes like pension plans, FDs or insurance policies to reduce the risk levels associated with your investments. Apart from investing in intangible assets, you can also diversify your investments in tangible assets like real estate. Real estate however, ranks low in terms of liquidity and makes it difficult to get your money easily.
Structuring an appropriate investment is just the beginning! Once you execute the planned investments, you have to be vigilant in monitoring the market performance and its effects on your investments. You also need to stay up to date regarding the updates in laws and rules of investments. Once your plan is devised, market research should be done regularly. In addition to these practices, monitoring your investments for output and the market trends helps you in managing your money effectually.
Also Check: Bajaj Finance Fixed Deposit