Investment: Now is the right time

We need to start our investments as early as possible. Now is the right time to start the investments if we are earning.

We should create a diversified portfolio to minimize the risk involved in investing. We can invest in Fixed deposits, recurring deposits, gold, government bonds, mutual funds and stock or any combinations to create wealth.

Once we have created a portfolio, it will start generating incomes in the forms of interests, dividends and capital appreciation. The financial portfolio will reach to a stage of it being working hard for us to cover our monthly expenses too.  

Investment: Long term plan

Once we have decided for long term investment plan, do no change it. Keep the plan unchanged for a very long period of time, if our selection is good and correct. Review the investment portfolio regularly and make necessary changes in the portfolio and continue as planned.

Except the investments giving the fixed return, all others are subject to market risks. The market will be volatile and accordingly the portfolio would give positive or negative return in the short term. But in the long term, the return would be in favour of investors.

The investments like gold and equity shares can be transferred to next generation too. 

Investment: Sector preference

If we want to build our portfolio on the basis of sector, we need to consider the total weightage of the stocks in a particular sector.

Banking and financial services lead in Nifty 50, followed by energy and IT sectors. After selecting the sectors, we can build our portfolio considering the weightage of stocks in the particular sector. As for example HDFC bank leads the banking sector.

Invest in Market leaders. Invest in top 1, 2 or 3 companies in a particular sector.

Bank nifty is available in ETF to invest, if we are not able to decide where to put our money in Banking sector.

Investors should plan their portfolio in such a way that they need not worry about the selected stocks as long as the stocks remain the market leaders. 

Investment: Diversification

Do not put all the eggs in a basket.  It means do not put all the money in a single investment. Here comes the diversification of investments.

Investing is as important as its diversifying. Plan the combination of four or five types of risky and non risky investments first and invest.

Young investors can take more risk than elderly investors. Young investors can invest majority of their investments in mutual funds and share market while elderly investors can take less risk concentrating more in investment plans with fixed return.

Investment: Shares & ETF

Investors have the option to invest in company shares or index exchange traded funds (ETFs).

We can invest in the shares of the companies listed on BSE and NSE. Index ETFs like Nifty ETF, Sensex ETF and Nifty bank ETF are also available for the investors who do not have knowledge about the share market. Other ETFs are also available for investors to diversify their portfolio.