Over the course of the lock down, India saw an uptick in the number of investors. This is because, over the years, many new investment opportunities have come forth and investors are willing to put their money in them. For those who are just testing the waters, or for those who want to expand their portfolios, there is a plethora of investment opportunities available. But it is crucial to pick the ones that work best for you.
Here are a few ways you can pick and choose between the best available investment opportunities.
Criteria To Choose Investments
Before planning an investment profile, review your investment goals. Divide your proposed investments between cash, fixed-income from alternative investments, securities, and shares (equity). The breakdown of your asset allocation ultimately depends on your risk tolerance and expectation of the returns. A conservative investor may opt to hold 80% of the portfolio in fixed- income and 20% in equity. The reverse could be true for an aggressive investor, while a balanced investor might follow a 50-50 combination.
The deciding factors in making an investment choice stems from underlying factors and investment strategies. Picking the right instruments that suit your risk profile and goals is the key to good returns. Let’s take a look at a few of them.
Underlying Factors
Each investment platform in India needs to be analysed thoroughly as part of the investment filtering process. Some important factors that need to be considered are:
Tenure
Evaluate the various investment opportunities in India from the angle of return and growth in the short-term and long-term horizons.
Goal
A clear-cut financial goal for your investments is necessary. Building a corpus for a child’s education, buying a house, planning for retirement, etc are strong reasons that compel you to delay instant gratification and invest money.
Liquidity
Cash is the most liquid investment but it comes with no return or growth. Some investment opportunities in India like real estate may provide higher returns without providing liquidity but long- term high returns. Keep short term investments for liquidity and create long- term investment for high future returns
Risk
Risk is arguably the most critical factor when analysing both short-term and long-term investments. However, a choice of low- risk alternative investments on multiple platforms brings steady monthly returns. Ideal for the appetite of a conservative investor, this investment opportunity invites low ticket size investment in some of its best products.
Investment Strategies
Investing your money without an investment strategy is like entering a boxing arena without a game plan. An investment strategy will help evaluate your strong and weak investment performance and draw your focus on low- risk investments helping you in scaling your investments steadily instead of losing on high- risk volatile investments.
It is also important to quantitatively figure out your goals. Having a corpus of a certain amount to retire by a certain age is a specific and quantitative investment strategy.
Try out multiple investment opportunities as diversifying your investment portfolio will help in better wealth creation. Low risk alternative investments are the most trending investments of our time.
Value Investing
Platforms offers commercial real estate and start-up equity investments. These could be apt examples of value investing. Your investments mature with time into high returns. However, in commercial real estate investments, you start receiving a quarterly value on the principal.
Income Investing
Income investing involves buying securities that generally pay out dividends and return regular fixed income. Bonds, asset leasing, inventory finance on multiple platforms provide steady monthly returns on your investment.
Growth Investing
Growth investors focus on companies that generate above-average growth, through revenues and profits. Investing in start-up equity through multiple platforms will help you to invest in smaller companies that have high potential for growth.
Small-Cap Investing
As the name suggests, small-cap investing involves low-ticket short- term investments for a maximum of 12-36 months. Making monthly return possible for investors, these investments on multiple platform yield up to 21% pre- tax IRR.
Socially Responsible Investing
Start-up investment is a great way of supporting the start-up ecosystem. From financing inventory or leasing assets for promising start-ups investors earn good returns. This contributes to supporting a healthy start-up community through start-up equity investments, investors can raise money through crowdfunding, to earn high returns.
To conclude…
Perform a technical and fundamental analysis of all your investments. Evaluate the performance of other potential investments that you wish to invest in. Study them closely until you understand how they work and help you in touching the financial milestones you have set. Once you are fully convinced, choose the investments that add the right value to your investment portfolio.
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