Last week, we held a webinar on investing. In case you missed it, join our community here for access to a free video recording. For some quick tips and tricks to invest like a pro, keep reading!
3 Tips to Maximise Returns & Minimise Risk
Stock Up How do fixed deposits and stock investments compare? While fixed deposits might be a good short term investment, stocks are a great long term investment with a significantly higher compound annual growth rate (CAGR). Remember, diversity is key - especially in investments. Combining fixed deposits with stocks for a 1-2 year investment is a great option. To begin investing in stocks, go to a large brokerage firm that you can trust and figure out some stock market exchange traded funds (ETFs). When you go to a broker or bank, you can open a demat account - a type of account used to hold financial securities and buy stocks. ETFs tend to be less complicated as compared to mutual funds. Mutual funds are offered by banks and large companies and have a manager that makes decisions on where to invest whereas ETFs are simpler, broader indexes with no individual taking the decision. For all things investment-related, check out Varsity by Zerodha - a free extensive and in-depth collection of stock market and financial lessons.
Get Your Hands on Land Consider investing in land over apartments for greater usage flexibility and higher asset value appreciation. Since land isn't advertised nearly as much as apartments, you have to dig deep. For the best return on investment, find localities near metro stations, highways or dense areas as these assets will appreciate even more as cities continue to develop over time. As plots are much cheaper than flats made by builders, you can spend more money on budgeting for custom decorations and design to fit the needs of your lifestyle.
Reap the Foreign Fruit While all investments come with a fair amount of risk, diversification helps reduce that risk by making sure you don’t put all your eggs in one basket. One way to diversify your risk and account for the inflationary economy of India is to divest in the US market. The currency of the US Dollar is significantly stronger than the Indian Rupee which reduces risk even further. Investing in the US market is allowed by the Indian government, and you can begin to invest in the US market by directly opening an overseas trading account with a domestic or foreign broker.
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