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5 Biggest Investment Lessons to Master This Year

Reviewing or balancing your investments is a smart practice at the start of every new financial year. This ensures that your money works as hard as you, and earns returns that will help you achieve personal goals, such as getting one step closer to retirement or buying an asset.

Right from popular term deposits, time deposits, and market-linked savings to investing in gold, currencies, etc., the list of investment options available to you is long. So, rather than basing your investment choices on pre-conceived notions or hearsay,adopt an updated and organised method to choose the most lucrative options for maximum gains.

Take a look at some Investment Lessons that will help you ensure that your money grows this year.

Research the market keeping prospective returns in mind

While choosing instruments, research market trends as they have a bearing on your investment’s performance. Be abreast of changes that are taking place, such as a shift in government policies and RBI directives, and evaluate how they can affect the rate of return.Then, decide which options will serve you betterin the long-term and in the short-term. Also, when carrying out this exercise, don’t forget to include your risk appetite. This will help you decide the ratio in which you want to divide your savings between various investments.

Review past performance of new and old financial schemes

Even if you’re investing in an instrument for the first time, view how it has performed in the past year or two to see if it makes for a smart financial decision. Also, review elements that make up your existing investment portfolio to decide the ones that you should retain and ones that you should withdraw from. This will allow you to make the most of your investment and ensure that you don’t repeat any mistakes from the past.

Invest in stocks and real estate for long-term growth and FDs for short-term returns

If you’re looking to invest to create wealth for your future, consider investing in stocks and real estate.When you invest in these instruments for the long run, you can generate a sizeable amount of wealth. Also, any fluctuation in returns is likely to even out over a long tenor. As a result,your overall gainswill be higher when you invest for a long duration, as compared to a short period.If you want to stay invested for the short term, consider fixed deposits.

You can select a competitive Company FD and gain from a higher rate of interest, up to 8.20%, and get returns that beat inflation. Apart from that, you can invest for a period as short as a year, if you wish to. Certain company FDs also enable you to start investing with just Rs. 25,000.

Pick investment options based on your needs and goals

When evaluating your investments, first list down your goals for the year such as buying a house, undertaking home interior work, and going on aoverseas holiday with your family. Alongside the goals also mention your immediate needs such as paying your child’s college fee, buying advanced machinery for your business, and repaying debts. Once you define your goals and needs you will be able to pick specific investments to cater to specific needs. This way, you will find it easier to pick the right mix of investments as per your current financial situation.

Refrain from following the majority

It may be tempting to follow what your colleagues or friends are doing when it comes to investments. But your investment needs are entirely unique. So, rather than basing your decision on popular belief, do your research. Read publications that offer nuanced insights, seek help from online resources or hire a financial expert if you want to overhaul your investment portfolio.

This approach will ensure that your investments are suited exactly to your needs and offer the right mix of safety, high returns, long-term wealth as well as liquidity for immediate needs.

Adopting this strategy will help you keep uncertainty at bay and make it easy for you to make smart investment choices time after time, so you can ensure maximum returns for your corpus.

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