How to Set Your Goals with Planning and Investment ?

You’ll have different financial goals throughout your life. These goals are segregated as short, medium, and long-term. Normally, short-term aims are those, that are due within two decades. Medium term financial goals must be met within two to five years. All financial objectives beyond this period are classified as long-term goals.

Irrespective of your life point, you may easily achieve your financial goals through meticulous planning and after sound investment strategies. The investments depend on age, current financial situation, and your risk appetite.

The goal of the financial objectives determines your choice of investment product. If you are retired without any financial commitments and have some spare savings, you may choose to invest in schemes offering an assured monthly income.

Some of the most common safe investment avenues include fixed deposits (FDs) and government securities. On the other end of the spectrum are risky products such as equities, company debentures, and commodities. If you are completely risk-averse, investing in government securities is the safest option irrespective of the duration of your financial goal. However, the returns on these investments are not very high and frequently inadequate to meet the rate of inflation. You can use Inflation calculator to get idea on inflation . Nonetheless, if you choose to invest in government securities, it is recommended you invest a large capital and start early in your career.

Et us now study what kinds of investment avenues are suitable to meet various financial objectives.

Short-term goals
When you invest in debt instruments, you are unable to achieve capital growth. You may have the ability to raise your funds if you re-invest the interest, which gives it the power of compounding. However, you want to remember that interest investment will be in a lower rate due to the declining market conditions, which reduces your return on investment (ROI). By using ROI Calculator you can easily calculate ROI. However, investing in debt instruments to meet short-term goals is advocated because even if you are willing to assume higher risks by investing in other choices like stocks, it may lead to capital erosion in the short-term.

Medium term goals
Planning for medium-term goals comprises a mixture of secured and high-risk financial tools. The high-risk products provide the advantage of capital growth. On the other hand, safer financial instruments ensure periodic income. Opting for a balanced mutual fund scheme is a good choice to invest and meet your medium term financial targets.

The most appropriate way to meet long-term goals is to invest in high-rated company stocks and bonds. A small part of your overall investments might be in safer debt products. Additionally, public provident fund (PPF) and federal pension system (NPS) are other available products to meet long-term financial objectives.

Stock investing to earn high long-term yields

Since the Sensex first came into existence in 1979, the market has not seen a single 15-year period once the ROI was negative. To get a seven-year period, there were only three times when the market was in the red. If you believe 10-year period, there’s only 1 time when the equity market delivered a negative ROI.

  1. When you purchase long term, the possibility of losses reduce
  2. Sensex outperforms the rate of inflation
  3. Investing in the long-term produces excellent returns
  4. As investment horizon increases, the volatility and range of ROI reduces
  5. If You Decide to invest in blue-chip companies, you are able to earn higher ROIs

Now that you understand that stock investing is a rewarding option, here is how you may invest in equities. Step one is to open a demat account online and a trading account with a trusted broker. The trading account is used to buy and sell stocks on the stock market. Much like regular bank savings accounts, a demat account is used to hold your investments in a single site. When you make a purchase, the shares are credited to this account and when you sell the shares, the number is debited from your account.

When you invest in stocks, you have several benefits. Firstly, you may earn periodic returns through dividends, rights, and bonus issues. Furthermore, as the prices of the shares increase, you like capital growth.

If you wish to begin earning high ROIs in the stock market, complete the online demo account opening formalities today and begin investing.

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