Money is too important, for all of us! But what is more important is having money to suffice our future needs along with the present ones. Agreed? Future is uncertain and so are the needs. But we can always anticipate and get prepared in advance for some of them. So saving money does not solve this purpose until we take our mind towards multiplying these savings.
And here comes the process of ‘wealth creation’. Equity Market is one of the preferred and lucrative way to go for this. But as we know, it is not an ‘all safe’ game. It is full of risks and uncertainty. Despite that, many become successful as equity investors. What makes them above those not-so-successful investors is their clarity on basics and of course, the experience! You must have come across numerous ‘tips n tricks’, guides etc to excel in equity market. But let me tell you the even more important thing than these; and that is, their usage and proper understanding. Very minute details on what to do and what not to do make a huge difference. Have a look on these and try with your wisdom and judgment:
- The very first and the most basic thing to reduce equity risk is ‘diversification of investment portfolio’ and that is, investing your money in different companies instead of one.
- There is no asset that is ‘risk free’. Only the degree varies with the asset, so invest wisely!
- Do not invest anywhere and everywhere ‘just like that’! Consult an investment expert PLUS do a thorough research on your own. You should know where you are investing and how has been the past records of that company.
- Never invest in assets altogether that are co-related! By doing this, all your assets will get affected even when a single one is under performing.
- Do not BLINDLY trust the predictions! There is always a possibility of outcomes other than the predicted ones. That is what we call ‘risk’.
- ‘Higher the risk, higher the returns’: DO NOT let this overpower your investing strategy and make you greedy. Be wise and logical before taking any step with regard to your investments in equity.
- Equity market is very dynamic! Invest only a portion of what you save. No asset can guarantee you ‘100%’ return. Even a 1% risk is risk! Do consider even the least risk involved.
- Do not run behind profits only, pay attention to your credit scores as well. Good credit records improve your credit worthiness with which you are able to avail loans easily.
- Do not trust company which gives 100% profit guarantee.
You can never control the market movements but your investment decisions are solely yours! Understand this well and you will be able to do your ‘safe’ wealth building. So choose wisely and invest safe. If required do not hesitate to take guidance from experts.