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Investing for beginners

Guide to Investing for Beginners

Investing is the first step in growing wealth. The art of making smart investment choices, understanding the intricacies of portfolio diversification, or having a fair understanding of the market is not as confusing as it sounds. Making prudent investments is something a new investor can easily do with a bit of education.

Asset Allocation

Equity, bonds, commodities, and cash equivalents. There are so many product classes available to invest in, and the process of deciding how much money to invest in which products is called asset allocation.

Investor Profiles

Your Investor Profile to investing is what a driver’s license is to driving. You don’t start without one. If your investment products don’t fit your profile, the potential risk is an imbalance in your overall asset allocation, meaning you might be putting too many or too few eggs in the wrong baskets.

Time Value of Money

Time value of money is the idea that an amount of money is worth more today than the same amount at some point in the future. This is because of the earning potential of that money. Time value of money looks at how much money can be worth if invested now as opposed to later.


Inflation vs Savings

The key to levelling out the purchasing power of your savings is allowing your savings to grow faster than inflation in the economy. This is where a disciplined investment plan with a balanced asset allocation, time horizon and risk profile comes to the rescue.

Investment Bonds

Bonds provide a worry-free stream of income and are among the most valuable tools in your investment kit. Because they pay interest regularly, they are a good choice for investors - such as retirees - who prefer a constant stream of income.

Time Deposits and Mutual Funds

While time deposits guarantee a fixed return in the decided time period, mutual funds offer market linked performance, thereby offering a potential of a higher return, subject to market risks. Assess the amount of risk you’re willing to take on and remember to invest as per your risk profile and in line with your goals.


Yield Curve

Yield is the expected return on an investment, or in the case of bonds – interest received from holding a security.

A yield curve shows yields by maturity. Typically, it depicts average yields on short, medium, or long-term maturity investments on a given day or week of trading. Therefore, it’s very important to take note of exactly which yield you’re looking at when making your investment decision.

Relationship Management

Wealthy people have one secret that helps them stay ahead – they manage their assets well. Surprisingly, efficient management of wealth is actually more important than earning it. But it’s not as easy as it sounds. Managing wealth efficiently can be tricky, complicated, and sometimes volatile. Many people spend their whole lives figuring out how to do that effectively, that’s where a wealth manager comes in.

Hybrid Funds

Hybrid funds are exactly what they sound like. They are mutual funds that invest in multiple assets classes at the same time, with the minimum being two. These can be assets such as Equities, Debts, Cash, Gold and more.


How to Start with Investment

If you are a beginner in the world of investing the idea of putting your hard earned money into a suitable investment vehicle might seem intimidating. So, before you start investing if you consider factors like your financial goals, your affordability in terms of money and time, and your risk tolerance capability, you will surely be able to make a smart investment decision.

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Frequently Asked Questions