Investors usually take special care of two things in investing. First, how is the liquidity of the option in which they are investing. Liquidity means how soon the money can be withdrawn from this investment option if needed. Second, how much returns can be found on that investment option.
Many people bank savings accounts (Savings Account) And fixed deposits (Fixed Deposits) Prefer to put money in. In this, if needed, they get their money immediately. Second, there is no fear of drowning money in them. On the other hand, some investors like to invest in stocks and real estate, as they have scope for good returns. However, there may be difficulty in withdrawing money immediately if needed.
A smart investor tries to create a balance between the two instead of using either one of the two options. He prepares his investment strategy according to his financial goals, the duration of the invoice and the ability to take the risk. Some things are important in investment. This will give you attractive returns on your investment. Also, if needed, your money will soon come in your hand.
1. Understand your ability to take risk
In investment, first of all we should understand our ability to take risk. The capacity to take the risk of each investor may vary. Usually younger investors take more risk and as the age increases, the ability to take the risk decreases. How stable your income is. If the income of an investor is stable, then he can take more risk for more returns. Investor must have an emergency fund. If he has an emergency fund, he can take more risk.
2. Take care of investment goals
You need to understand the goals of your investment. Some of your goals may be 1-2 years old. For such a goal, you have to invest in a safe option of investment. Medium term goals are 3-7 years old. For this, equity and date can be invested. Long -term goals are usually over 7 years.
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3. Investment Options according to investment goals
It is very important to choose investment options according to investment rounds. For example, for retirement planning, you can not invest for short term or medium -term goals in the investments in which you can invest in. If you are investing for retirement, then you can invest 60 percent of the money in equity mutual funds or index funds. 20 % of the money can be invested in PPF.