Mutual funds, SIPs, terms insurances, health policies – seriously the market is filled with so many options to invest and gain. While one can understand these investments for institutional investors who invest in larger amounts; nowadays, retail investors are also taking a leap to look for profitable wealth creation options.
In order to make your money work, it’s important that you invest in an instrument that works for you. While institutional investors are aptly positioned to make informed decisions related to their wealth, retail investors may not have the required guidance.
If you are a retail investor, here is a piece of essential investment advice to make a serious note of:
1. Empower yourself with how the financial products work
Whatever the financial product, it certainly has its own objectives and fundamentals. Take this for instance – a fixed deposit invests in safer avenues for wealth protection in comparison to equity mutual funds invested in market-linked instruments in order to achieve capital appreciation over the long run. Retail investors should cherry-pick financial products that align to his or her risk appetite and financial goals. If volatile markets make you nervous, opt for debt products such as a liquid mutual fund. Contrary, if you are willing to broaden your long-term investment horizon, then equities can be considered.
2. It’s not advisable timing the market
Retail investors try timing the market for a low or a high-point. By doing so, they end up missing valuable wealth creation opportunities. Since practically no one can consistently predict the highs and lows and pinpoint the right time to venture into the market, SIPs constitute a better platform. Through these, one can invest a fixed amount regularly across market cycles. In the long haul, SIPs help investors average out the investment cost because when the markets are low, one automatically buys a greater number of units and likewise when the market is high.
3. Make an investment habit by starting small
Being a retail investor gives you several options and you can consider starting small. It’s advisable to get comfortable with a financial product before leaping into a long-term or a multi-year financial plan.
Most mutual funds and SIPs enable you to invest as low as Rupees 500 per month. This amount can be gradually increased in due course as you get comfortable with an idea of a regular investment.
4. Give your financial reins to the experts
When it comes to managing your finances, policies and assets, it’s better to let experts manage your money. Doing so leads to informed decisions; not to mention also guards you against making reckless planning. With professional wealth managers and portfolio experts, you can be rest assured that your money is being invested to meet your objectives.
BeWealthy, the most sought after and valued insurance and investment consultancy service provider has the tools to help retail investors make the most of their money. Subscribe to our page for regular insights on insurance policy portfolio management, investment planning and more.