individual intends to fulfill his/her short-term or long-term financial goals
of life. It is very crucial to choose an effective trading strategy in order to
create a financial cushion for your family. Before choosing an investment
strategy make sure that the strategy is not only aligned with your current
financial needs but also with your long-term financial goals. There are various
factors to keep in mind, in order to make the right investment. Some of the
factors are mentioned below.
crucial to determine your investment objectives before investing in any
financial instrument. You can invest in bank FD’s (Fixed Deposits) or Bonds
that provide medium or stable returns if your objective is to invest in
long-term financial instruments. You can also consider employing your money in
Mutual Funds (MF’s) or shares if you have a high-risk appetite and you are
willing to multiply your money. So according to the investment objective, an
investor should diversify their trading portfolio which can minimize risk and maximize
the chances of profit.
investment returns are directly proportionate to the risks involved in it. It
is often considered as, higher the risk endured, higher the chances of
profitability on investment. However, risk taking ability differs from person
to person. Some traders believe in operating at a low or moderate risk whereas
some traders opt for highly risky investments.
Once you know your risk appetite you can choose the most suitable
investment from a wide range of options.
the amount of investment.
amount of money can be invested in one go. However, most of the traders prefer
to invest in a slow and steady manner. It is important to decide upon how much
amount do you want to invest in a particular share before making any investment
decision. You can save yourself from any
financial burden by maintaining a disciplined approach which will help you as a
beginner to avoid loss of a huge chunk of money in one go.
investing in stock market, age plays a prominent role. Experts often advise
that the early you start making the investment, the more amount of money you
can grow for a long period of time. Moreover, it is beneficial to invest at a
young age as you can invest for a longer period of time and maximize your
profits. Starting to invest at a young age means you also have the leverage to
take high risk. On the other hand, you will have to consider multiple factors
such as inflation, health care, retirement planning, child education etc. if
you make investments at an old age. This will not give enough time to your
employed capital to reap good amount of profits for you.
In order to
cater the requirements of different traders and investors, there are a wide
range of financial products available in the market nowadays. Most of these
financial instruments are complicated in nature. It’s vital to have a good
amount of knowledge of a product before investing in it. Having subtle
knowledge about the financial product not only helps you to meet your financial
goals but also assists you in making supernormal profits.
example- If you are willing to invest in Insurance plans, you can consider
investing in a term life insurance plan which facilitates high insurance
coverage at an affordable premium price. You can opt for Mutual Fund schemes,
ULIP’s etc. if you want to create wealth and receive high investment returns.
you stand financially
important to understand your financial position before deciding to invest.
Investments must be made according to your short-term and long-term financial
objectives. You can invest weekly, monthly, yearly or as a lump sum to fulfill
your financial objective.
the above-mentioned factors in mind, you can make effective investment
decisions as a beginner and can determine which financial instruments are best
suitable for you. Most importantly, don’t forget to have clear knowledge about
the financial instrument you want to invest in.
you know certain key points to consider before trading or investing in the
share market, make sure you use them wisely and choose the correct investment
more about the financial market, stocks and financial instruments, you can
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