In recent years, the Indian market has seen a surge in retail investors, which are commonly just non-professional individuals that interact with the Stock Market with their own investment endeavors or through brokerage firms.
In 2021, there increased by an astounding 14.2 million, and it continues to grow in 2022, indicating a dominant presence of such investors on Indian stock markets.
However, since most of these investors don’t have real experience or the knowledge required to invest, they rely on due diligence and trial-and-error tactics.
These next couple of tips will help you make the best of your money as well as make the best calls when investing it.
The first step is to set a financial goal, as it helps you draw up a blueprint for your investing career as well as identify the paths you may need to take to achieve them.
The amounts you invest will directly relate to these goals that you set, and that being set, your goals should be separated into three different categories.
Short-term investments usually range from six months to a year, and the goals for these investments can vary from taking a mid-year vacation to building an emergency corpus.
For these sorts of goals, you should usually look at liquid funds or even bank-fixed deposits.
Medium-term investments, on the other hand, range from 3 to 5 years and usually have goals that either focus on accumulating funds for a down-payment on a home or perhaps even a profitable real estate or piece of land.
Finally, long-term investments involve planning ahead by at least 15 to 20 years, sometimes even more, and are common for equity investments, especially if you’re a first-time investor.
Equity funds can bring you massive returns which ignore inflation and are particularly good in the current market.
Don’t act on emotion
That being said, you shouldn’t rush in mindlessly, and if you’re investing in equities for the first this is even more true, as larger investments carry a certain amount of risk that might be too much for your risk tolerance early into your career.
If your first investing experience is a bad one, you might feel put off from ever investing again, and with all the potential the market has to offer, it’d be a real shame to miss your best opportunity at making it big over a beginner mistake.
Allowing your emotions to cloud your judgment could possibly be the worst thing you could do, as it impacts your patience, and in turn, prevents you from weeding out non-profitable investments in your portfolio.
If you encounter a market in a bull run, you’ll notice that a lot of the less-experienced investors usually become overrun with greed and end up investing at incredibly high valuations, way above the actual values.
If you manage to steer clear of any of these bad habits, you should be in full control of your investment portfolio and your investment career will be a relaxing cruise through the most challenging situations from here on out