Investment tips for beginner

The habit of saving is inculcated in our minds since childhood; hence we turn out to be great savers even in extreme times. But when it comes to investing our savings, we are a bit skeptical. This is because we are afraid of losing money to risks associated with investments. While the fact cannot be denied, one can avoid the risk by investing after thorough research and understanding all aspects associated with the investments.

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If you are a newbie investor and have no idea how to start your investment journey, then this article is for you, in this article we will be sharing investment tips that will help you go a long way.

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    1. Set a goal

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Setting a goal is the first and foremost important step in investment. Although the basic purpose of investment is to grow money. However, your goal is the reason why you need the money. One should choose investment options as per their goals i.e., short-term goals or long-term goals. Ensure you set SMART goals.

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S – Specific

M – Measurable

A – Achievable

R – Realistic

T – Time bond

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      2. Study various investment alternatives

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Based on your investment objective study various investment options available in the market like shares, debentures, bonds, real estate, gold, etc. Studying different

alternatives gives your insight of the investment and helps you choose an option that suits you best.

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     3. Risk Analysis

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Although it is said 'the higher the risk, the higher will be the return.’ One must invest in assets only after carefully analyzing the risk associated with the investment, not only that but you also need to analyze your risk tolerance level based on your financial condition. If you fall under the category of risk taker i.e., you are ready to deal with the uncertainty of the market and can take a high amount of risk, you can invest in equity shares and other high-risk investment options. If you are averse, i.e., you want to stay on the safer side and take minimal risks, you can invest in debt instruments like debentures, bonds, etc.

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    4. Make a plan to achieve your goals

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After you have explored various investment options and their risks, make a well-planned strategy to invest in a financial instrument that will help you reach your goal within the desired time period.

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    5. Diversify investment

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The famous saying ' Don’t keep all eggs in one basket’ is often used while making decisions regarding investment. Diversifying investment into various asset classes not only gives you protection against market volatility but also provides benefits of various financial instruments that you invest in, and helps you earn optimum with minimal risk.

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    6. Make decisions rationally

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Fear of losing money and greed to earn more and more can adversely affect your investment decisions. So, ensure you take investment decisions rationally and don’t get driven by emotions. Investment should be done only after well research and not with the influence of any other aspects.

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As a new investor, taking investment decisions on your own without prior experience can be very difficult and risky. This is where financial advisors come into the picture. Financial advisors are professionals who have knowledge, expertise, and experience in the field. A financial advisor creates a diversified investment portfolio based on your goals, financial condition, and risk tolerance level.