Investing for the first time has its own charm and it is a feeling that every investor goes though. Investing for the first time is a crucial decision that you are taking with your hard earned money. It is very important to take this decision with uttermost care.
Start early – You should start investing in as early as you can. By staring early, you are giving yourself additional time for failure and success in investing journey. By cibil scorestarting early you are also giving yourself benefit of “power of compounding”. Power of compounding works as magic if you start early. For example if you invest Rs 1 lakh at the age of 25 then you will get close to 1 Crore Rs by the time you turn 50.
Invest in SIPs – SIP stands for “Systematic investment Plan” and is one of the best options to invest in market. You can invest through SIP in mutual funds. Mutual funds are the best option for first time investors. These mutual funds are professionally managed by fund houses invest in large number of companies. Before investing in any mutual fund, you should look for past average performance of the fund house, total experience, sectors and companies investment optionsmanaged etc. There are different types of funds available in market like large cap fund, mid cap fund, small cap fund, balanced fund, debt fund etc. Initially, investors should look to invest in balanced fund through SIP. By taking SIP route to invest in stock market you are reducing the burden from your side and also reducing the cost of funds over a longer period of time.
Say “no” to day trading – Day trading is an investment strategy adopted by some investors to invest or exit daily from the market. You should avoid this strategy and remain invested for longer period of time.
Dollar cost averaging – It is advisable for first time investors to not to invest loan against GPA propertytheir entire money at one lump sum payment in investment. For Ex – if they have 50 thousand to invest in stocks then they should break down this into 10 investments of 5000 each for 10 consecutive months. This will reduce their average cost of acquisition and even if market takes a down turn then their loss would be minimize due to “Dollar cost Averaging”.
There are plenty of new options available to first time investors to invest their money intelligently. It is advisable to invest in through SIP mode in balanced funds and tax saving funds. First time investors should avoid the trap of day trading and advice of relatives. Investment for a longer tenure is advisable for first time investors to take advantage of “magic of compounding” rule. The article on Loankuber made me inform about investment strategies for first time investors. This article on investment options proved to be very informative and beneficial to me and if you are a fellow borrower you should definitely give this article a read.
Keywords: Investing, Startup
By: Asha Bansal
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