The 5-day festival of lights begins with Dhanteras. In our culture, this is the biggest festival of prosperity. Since ancient times, people have been buying gold, silver, utensils, houses etc. on this occasion. The learning from the investment point of view is that we should invest a small part of the income. There is a tradition of starting a new investment in the stock market on the auspicious time on Diwali. Here we will discuss about starting an investment in an easy way through questions and answers and making strategies. When should one start investing?
‘The best time to plant a tree was 20 years ago. The second best time is now.’ If we look at this saying from the investment point of view, the sooner we start investing, the better the returns can be. This investment can help in buying a house, car, traveling, starting a dream project or paying your bills in the future. For how long should we invest?
The most important thing is that investment is a long term venture. Short-term profits are often deceptive. The longer you invest, the better returns the power of compound interest can give you. Give your investment at least five years. Keep in mind that volatility is a part of the market. So don’t panic on a fall. How do I create an investment strategy?
Just like you can’t build a house without a blueprint, it is important to have a strategy before you start investing. First, set aside some money to invest in your future. Also, create a separate emergency fund to cover 6-9 months of expenses. Start investing now and educate yourself, so that you can calculate and assess risk to get a return on your investment in line with your goals. Here are some questions to consider- How much money do I need to start investing?
You can start with Rs 500 a month through SIP in mutual funds. There are shares worth less than Rs 1 to Rs 1.26 lakh for investing in stocks. The fact is that some of today’s biggest companies started with penny stocks. When Amazon’s IPO came in 1997, one share was less than two dollars. 25 years later, one share is now at $3,300. How should we build our portfolio?
New investors should focus on diversification and asset allocation to build a portfolio. They can choose safe options like mutual funds, blue chip stocks, gold ETFs. New investors can follow the thumb rule of 100 minus age. Suppose someone’s age is 30 years, then 100-30=70, which means this investor can invest 70% of his investment in equity. The remaining 30% can be divided equally between gold, bonds and retirement funds.
