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Best investment tips for beginners

Best investment tips for beginners - Aegon Life

Investors certainly aim at profits, however, it takes them a good amount of time to understand when to invest and where to invest. If you are a beginner, it is even more important to have a good knowledge of the shares and the stock market. This is possible if you begin investing in a disciplined form without taking any risk. Such a practice can help you save a good amount of money over a period of time. Here are a few tips to help you invest wisely:

Long Term Objectives

Investing in shares and stocks with long-term objectives can prove to be advantageous. Whether you wish to purchase a property or save for your child’s education, setting long-term goals will enable you build patience and learn the importance of saving. If you chose to invest in a scheme for short period and withdraw funds, it is advisable to invest in another instrument simultaneously in order to balance the volatility.

Study the Market

Before making an investment in the stock market, it is important for you to study the market including the several securities that constitute the market. Learn about the financial metrics and definitions, order types, time of investment, types of investment accounts, method how are, methods of selecting stocks, etc. This will help you make a better selection and assess the risks.

Risk Level

You should carefully analyse the risk associated with investment option before putting into your capital. Draw an all-inclusive comparison between various schemes in order to identify the risk. This will help you understand the level of risk involved with each product and invest accordingly. You will save yourself from incurring unforeseen losses.

Diversification

This is usually done by expert investors once all the research has been conducted to calculate the risk associated with investment. As a beginner, you will have to gain some amount of experience before diversifying investments. Later, you can invest in a variety of funds. Diversification is a preferred method in order to manage risk.

Control over Emotions

Emotions play an imperative role while investing in the stock market. The prices are constantly fluctuating and investors begin to take stress or feel lack of confidence regarding their stocks, whether they should sell them or retain them. Since actions are a result of emotions, it is important to ensure that all factors are taking into consideration before making a final decision.

A Guide To The Best Investment Plans In India

A Guide To The Best Investment Plans In India - Aegon Life

Each and every one of us is on the lookout for the best investment avenues for our hard earned money. With the plethora of options available in the market, it is very easy to get confused. While some investments may carry very high risks, others may not provide enough tax savings. An ideal investment is the one that not only provides goods returns, but also great tax savings with minimal risks. The key to profitable and safe investing is planning over the long term. Short term investments plan are generally more risky in nature and provide scanty returns. When it comes to choosing investment options, a smart investor always looks for safety along with significant capital appreciation. Here’s a list of the best investment plans that in India, that will give you the optimum returns for your money.

  1. ULIPs: – ULIPs or Unit Linked Insurance Plans offer the dual benefit of a life insurance policy and mutual funds. They are a suitable choice for investors who are risk averse, but want to reap the benefits of the stock markets. A part of the premium paid for a ULIP is utilized to provide you with a life cover and the rest of the corpus is invested in the stock market. Even though your money would be invested in the stock market, ULIPs carry minimal risks as it is professionally managed by fund managers. It offers a wide range of choices such as equity or debt based, according to the risk appetite of the investor. Moreover, ULIPs are also eligible for tax benefit under the section 80 C of the Income Tax Act. They can be an ideal investment option for long term financial goals such as down payment for purchasing property, child’s education, marriage etc.
  2. Mutual Funds: – They are the best investment option for individuals who want to invest in equities and bonds with a balance of risk and returns. Investing directly into the stock market is not everybody’s cup of tea, since it is laden with many risks. However, due to the professional management and the portfolio diversification provided by a mutual fund, they have become a popular means of investment in the recent years. An investor can also opt to invest in a mutual fund for a longer period through SIPs or Systematic Investment Plans and obtain more returns. Mutual funds are the best way to overcome the instability of the market by making small investment at regular intervals.
  3. Endowment Plans: – Endowment plans are life insurance policies that not only provide a life cover but also maturity benefits at the end of the term. Unlike other types of life insurance policies, an endowment plan will pay out a lump sum even if the policy holder is alive at the end of the policy term. They are a risk free investment which provides good returns and is a great tool for long term financial planning. An Endowment policy is also eligible for tax benefits under Section 80 C.

Simple Steps to Do Your Own Financial Planning

Simple Steps to Do Your Own Financial Planning

When you hear the term financial planning, the first thing that comes to the mind are complex financial statements and financial advisors. Ever thought about putting together your own financial plan? No one could know your financial needs better than yourself. Planning for a secure financial future might seem like a daunting task, especially if you are not sure about what your financial goals are. Intimidated by the uncertainties, most of the people end up hiring financial advisors to chalk out a financial plan for them. However, it is not always necessary to hire a professional to get your finances in order. Given below are a few simple steps that will help you do your own financial planning:-

  1. Set goals: – Goal setting in relation to your finances is the first step towards planning your finances. You need to be clear about what you want to achieve financially so that you can plan accordingly. Think about both short term and long term goals. Short term goals would include paying of small debts like credit card bills and long term goals would include children’s educational fund, retirement funds etc. To help you estimate the amount of money required, there are financial calculators such as retirement calculators, term premium calculators etc. which are available in the Aegon Life website.
  2. Asses your current financial standing: – Before you set about planning for the future, you need to have a good understanding about your present financial situation. Calculate your net worth by subtracting your debts (liabilities like mortgage loan or credit card balances) from the total amount of what you own of value (assets like your retirement and bank account balances). Don’t be disappointed if your balance is negative. A sound financial planning will enable you to turn around your finances.
  3. Stay protected: – you need to make provisions to stay protected from unforeseen financial disasters such as accidents, loss of job, high inflation etc. To minimize the impact of such financial hazards, insurance is a must. Life insurance, health insurance and motor insurance must be a part of your financial portfolio. Even if you have existing insurance plans from your employer, it should be supplemented with insurance that you buy on your own. Chances are, you need more coverage than you think.
  4. Learn to invest in the stock market: – Investing in the stock market is a great way to boost your wealth. Educate yourself on the basics of investing, learn the differences between stocks, bonds, mutual funds and exchange-traded funds, the various risks involved and the importance of diversification.