Starting on Investing

Investing is the foregoing of present benefits in order to be able to enjoy the returns in the future.
Don't spend that money now, Invest it.

Investing is sometimes equated with Savings. But savings is a passive use of money where funds are parked somewhere (usually in a savings account). Most likely, inflation just eats up interest earned on it.

While both are higly encouraged, (but sad to say hard and not likely to bve practiced); active investing can make money work for you by multiplyng your efforts.
Investing is being proactive and knowing/learning where your money works and how much it earns.

But as they say, a journey of a thousand miles begins with a single step. We hope that you go out and build up your savings and start investing. Through our blogs we would try help out in anyway (especially through investor education) for you to understand investing .


BASIC RULE of INVESTING:

"Risk - Reward" Trade-off

Less Risk, Less Opportunity for Gain
The More Risk assumed, the greater the Potential Return.

This should be the guiding principle in your investing activities. Your decision on where to put your money should be based on this.


And before you start to invest, you should know yourself first.

Identify your investment or savings need.

Objective: Where will you use your funds?
Time frame: When do you need your funds?
Risk tolerance: Are you an aggressive or conservative investor?

At this point, you should identify the risk that you can afford and the risk you can take. Can you afford to take a loss in the hope of making bigger gains? or do you have a heart condition that may make big market movements intolerable?


Next, know where you can invest.

COMMON SAVINGS and INVESTMENT INSTRUMENTS
Time Deposit
Special Deposit
Government Securities
Commercial Papers
STOCKS



Key Investment Principles

Identifying objectives and time frame
---------------Short term
---------------------------Monthly bills, operational expenses
---------------------------Funds needed within one year
---------------Medium term
---------------------------Upgrade of equipment or appliance
---------------------------Purchase of automobile
---------------------------Funds needed within 3-5 years
---------------Long term
---------------------------Retirement/Provident Funds
---------------------------Funds needed 5 years or longer


Match objectives with investment plan.

Do not put long term funds in short term investments.
---------------Short term- Bank deposits, money market
---------------Medium to Long term - Stocks, bonds or mutual funds

Match investment plan with risk tolerance
---------------Conservative - Fixed income and bonds
---------------Moderate - Combination of bonds and equities
---------------Aggressive - equities and foreign currencies