Secrets to Help You Get High Returns on Your Investments in India

0
17
Best Investment Options in India

Everyone loves to get very high returns on their investments. After all, that is the whole purpose of making investments in the first place. If you are looking to get high returns on your investments in India, this article will provide you with some secrets to do just that.

If you are wondering if now is a good time for you to invest in equity, you might have already lost at least half of the battle. However, don’t be disappointed! We assume that you are a new contender in the game and hence, you are not much aware of the rules. This is why we give you one more chance to remedy this problem. People often wonder about the list of mutual fund investments that can get them the highest returns. The definition of high returns is not necessarily the monetary gains on your investment,but it also involves achieving your goals comfortably and beating inflation.

There is a rule known as the 80:20 rule in the world of investment. According to this rule, people usually tend to waste 80% of their overall energy on things that contribute merely 20% to their financial success. On the flip side, they do not even dedicate 20% of their efforts to achieve 80% financial success. Let us check out where things go wrong! 

Time the Market

If you adopt the strategy of market timing as an investor, you are setting yourself up for a massive failure. It will hardly contribute to positive returns in your portfolio. Talking about advisors and investors, at least 80-90% of them focus on time in the market,and very few learn from their previous mistakes. Various studies and research have shown that implementing this strategy successfully can only get you a total of 3% on your overall returns. So, what happens to the rest of the 97%? If you wish to get high returns on your investments in the country, you must understand that the market is very unpredictable and you can never really time it. Therefore, you must avoid looking at the data as it keeps changing.

Selection of Fund or Security

Investors also often wonder about the best investment or fund for them. However, it is not the best question to ask yourself as an investor. An investment which you think is the best for you today might not be the best for you tomorrow. Some research shows that the diversified equity funds of two years are completely different. Therefore, “best” is nothing but a myth in the world of investment. You might be able to find some good funds that offer consistent returns. However, even these consistent returns will not contribute anything over 7% of the total returns. So again, what happens to the rest 93%? Looking for the best investments or funds to invest in is not the best way to move forward. If you are looking for high returns on your investments, the first thing that you need to stop doing is wasting your efforts trying to find the best investment or timing the market.  

Portfolio Construction

Portfolio construction is an important step,and it can do one of two things for your investments – it can either reduce the risk of returns, or it can increase your overall returns without enhancing the risk. Therefore, it becomes of vital importance to think about risks and returns in the same plane as they both go hand-in-hand.

Asset Allocation

Asset allocation is the most underrated yet the most crucial part of any investment that can generate high-level returns. However, less than 1% of the total investors consciously manage to do their asset allocation in order togeneratereturns. Some people have some investments in the form of equity or have something like debt,but it is usually not a very thoughtful effort towards investment. Asset allocation is a straightforward strategy yet one of the most difficult to stick to in the long run. In the words of investment gurus, making simple investments is the hardest. If you are wondering what asset allocation is, you will have your answer right here! It is the process of separating the ratio of assets as per the time horizon as well as the risk factor of investments. While doing this division, the weight given to each asset is kept constant throughout the process. After that, when your portfolio is ready, it requires you to rebalance the entire thing at a date that is pre-decided. This helps in demarcating the assets that outperform,and its proceeds can be used for the assets that underperform during a given period.   

Your Behavior

Your behavior plays an essential role that can be a game changer in the end. This is an aspect where the winners might end up doing all the wrong things and losing it all in the end. As a new investor in the equity market, you might think that people who enter the market when it is on the top and exit when it is at the bottom are foolhardy. However, in the words of the investment guru Warren Buffet, “In the equity markets, the rearview mirror is always clearer than the windshield.” Hence, as a life lesson, you must never be over-confident about yourself and your investments. You must be thoroughly prepared not to get stuck in the vicious circle of fear and greed. As many as 80% of the people in the market end up making the same mistakes until they lose everything. This is the reason why there are endless examples of people making money from equity,but you will seldom find people who can build their entire wealth through equity.

Final Words                                        

The world of investment is challenging and unpredictable. In order to succeed in this cut-throat world and leave with a good share of returns, you must act wisely and follow these secrets to getting high returns on your investments in India.

LEAVE A REPLY

Please enter your comment!
Please enter your name here