Money plays an important role in our lives. In almost daily walks of life, we need money. It is not easy to give simple advice. But it is not easy to follow them.
Here are five golden tips for all the investors.
Review investment mix
Look at how your money is allocated. People often make investment choices and then do nothing for years. This is not good. Reviewing your investment mix periodically once a year is adequate. The allocation mix should make sense for the investor's current life situation.
No risk, no return
Return without risk is not possible. If you are afraid of stock market fluctuations, you can check other options like bonds, debentures etc.
You shouldn't have all your eggs in one basket. If you are not investing your money and simply putting it all in a bank account you are not making any money on your money. Your money is losing value over time.
Study the Stock Market
If you are a beginner in the stock market is advised to study the stock market. Have an idea about the securities that compose the market. Study about various kinds of investment accounts, the timing of investment, methods of selecting the stock, etc. Understanding the market helps you to assess risks and make the right selection.
Diversification of Investments
Don't put all your money in one investment. You can invest your money in a variety of securities, bonds, gold, and many other schemes. You have to gain experience in the stock market before undertaking the diversification of investments.
Tax implications are important. You should have a concern about the taxes. You should always attempt to minimise the amount of tax you pay and maximise your after-tax return, but the situations are rare where you'll want to put tax considerations above all else when making an investment decision.