One-time investment in the stock market is considered a difficult decision. Investors are always careful at the time of investing the first installment of between Rs 1 thousand and Rs 10 thousand in the stock market. At the same time, with a large amount of money, i.e. an investment of Rs 5-10 lakh, there is a lot of risk associated with it. The reason behind this fear is that what will happen if you run out of deposits or savings?
This kind of situation can be avoided by implementing a certain strategy. To understand the situation properly, take the example of a 35-year-old man who wants to invest Rs 5 lakh. He has three investment options. He can invest his entire amount in shares or mutual funds separately or in both.
In shares
Any money manager advises investors to invest in installments. Investing all the money at once can be dangerous. Therefore, investment experts say that the investment ratio should be 60: 40 or 50: 50, based on risk profile.
There is also a strategic part of the portfolio, where long-term investments yield better returns. Since long term and strategic parts should be kept for at least three years. At the same time, technical parts can be used to earn fast profits.
Select shares can be changed to suit market conditions. It is important to remember here that each operation is subject to a tax of 15 per cent (for a period of less than one year) on short-term capital gains.
In mutual funds
The experience of investing in the stock market can be gained directly from investing in mutual funds. According to financial advisors, since the investment amount is quite high, diversification of the portfolio is quite necessary.
Before investing one should focus on its duration. After investment, you should invest according to when you need this money. Suppose you have enough money now and do not need money between the next 5 to 10 years then in such a situation it may be beneficial to choose equity diversified plans.
But if you need money after two years of investing, it may be better to invest in debt oriented hybrid funds. If the tenure is less than one year then invest in debt funds, as guarantee of security of return along with principal amount is considered important. Another way of investing is by investing 50 per cent in equity diversified funds.
Investment of the remaining amount planned transfer plan (S.T.p.) Can be done through. If invest 50 per cent, while after some time can transfer the amount to equity schemes.
Anybody S. T. P. The option of can be selected for a period of 6 months to 1 year, with investments being made in 6 to 12 instalments. S.T.P. It is more effective when the market has either reached its peak or there is uncertainty about the market going higher.
In both shares and mutual funds
Invest more in mutual funds than equity. Divide the amount of Rs 5 lakh into 2 3 ratios. Analysts do not recommend investing in more than 10 bluechip stocks for investing in stocks. They will have an important stake in the portfolio. People who have high risk appetite can invest some amount in mid cap stocks, but this should be done only after solid research. This is because there is more risk associated with small and medium stocks.
At the time of market rise, they beat Sensex and Nifty in terms of performance, but at the time of market fall, these stocks also see a very rapid decline. This happens because these are high vita shares. For investments in mutual funds amounting to Rs 3 lakh, experts recommend investing in a good equity diversified fund. Betting on equity diversified funds can be quite good, as it is a safer method than stocks. Such S.T.P. Or it can be done directly through investment. While investing in mutual funds and stocks, it is very important to remember to avoid investing too much in the same sector or theme.
For example, if you have invested in infrastructure funds, you may suffer losses if things do not go right. The second thing is to avoid being aggressive while investing and avoid investing in mid cap stocks and funds, otherwise the entire portfolio will become risky. If you have invested in mid cap shares then avoid investing in mid cap funds. Experts believe that an aggressive attitude can be adopted while investing in equities, but one should have a conservative attitude while investing in mutual funds.
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