Market Outlook: Here we have brought some special tips for those people who want to take less risk and earn more money. In other words, they want to take less risk and want to get more returns. One thing everyone believes is that with only a few exceptions, the stock market is a place where returns are highest. But it is also true that the risk here is equally high. Perhaps this is the reason why many people are afraid to invest money in the stock market. So today we will end that fear. Many people who are in the stock market are afraid that they don’t know how much return they will get. Invest more money or stop now. How much risk to take? Many such questions are running in the mind. So today we will also give accurate answers to these questions. Because today we are going to tell you how to balance risk and return in the share market.
Today, joining us in this endeavor are Prakash Diwan of prakashdiwan.in, Gaurang Shah, Senior Vice President of Geojit Financial Services, Sanjay Sinha, Founder of Citrus Advisors and Abhishek Aggarwal, Managing Partner of Rockstud Capital.
How to create balance between risk and return?
These experts say that first of all, understand the risk and return of investment properly. With higher risk comes higher return. Follow asset allocation. We can reduce risk by diversifying our portfolio. Understand your risk taking capacity and take risks as per your capacity. Along with this, take risks only according to your financial goals. If you have a long term perspective then you can take more risks.
What is special in equity?
First of all, there is liquidity in equity. There is high risk along with high reward in this. There are many investment options in this. You can invest in equity in many ways like shares/MF/ET. The equity market is safe and regulated. Its holding cost is quite low.
Portfolio Allocation
Experts say that you should give 50 percent share in your portfolio to large caps. Allocate 30 percent in midcaps. Whereas keep 20 percent for small caps.
value investing
Always choose stocks with high MOAT. MOAT means protection from competition and entry barriers. Keep in mind the higher the MOAT. The company will be equally safe. Keep the basics of investing in mind. That means start investing early. Don’t wait for the market to fall. Initially invest in top quality shares. Keep investing gradually and continuously. Understand the power of compounding. Don’t depend on simple interest.
Market view: In 2025, there will be profit in stocks which are profitable due to rupee weakness, big banks are also looking good
market trigger
These experts say that now the market will keep an eye on the third quarter results of the companies, the coronation of Donald Trump to the presidency and his policies, announcements in the budget, the pace of inflation and consumer demand.
Gaurang Shah’s advice to investors is to expect reasonable returns in the market. Follow the investment principle. Know the answers to your questions before you invest, not after. Don’t try to time the market. After investing, give time to the market. Book some profits and also review the investments. Do not invest all your money in a single share or sector. High risk has the potential for high return. The market remains full of uncertainties. There is no such thing as safe investment or guaranteed returns in the market. Follow asset allocation.
Prakash Diwan says that to create a balance between risk and return, assess the balance sheet risk and keep an eye on the financial health of the company. Estimate regulatory risk. Changes in regulatory rules impact the company/sector. Also keep liquidity risk in mind while investing. Many times exit from equity investment also becomes a challenge. Valuation risk involves paying a higher price for future growth. The greatest risk comes when we don’t know what we are doing. In such a situation, take any decision only after careful consideration and thorough research.
Disclaimer: The views expressed on Moneycontrol.com are the personal views of the experts. The website or management is not responsible for this. Money Control advises users to seek the advice of a certified expert before taking any investment decision.