5 Great investments instruments for retail investors and practical ideas

1. Stocks – In a volatile market, we are not sure to predict the future. A retail investor should be clear about his risk profile and choose his entry point correctly. He should be stay invested for long term to overcome the volatility and take advantage from the bull run. It is a best practice that, allocate (100 minus your age) % to equities and invest rest in debt funds, bullion and real estates.

Click Here to see the very useful Ten Commandments for Stock Investors

2. Mutual Funds – It is important to identify the type of mutual funds i.e. equity, debt, gold etc, from the basket to do the correct allocation. Investing through SIP (Systematic Investment Plan) certainly help you to protect from volatile market and erosion of capital. Investors should have a medium to long term view and clear objective to stay invested. Investors should be aware about the short term volatility in the market and required enough patience to stay invested for a long term to receive handsome returns from mutual funds.

When selecting mutual funds to invest, an investor should choose a fund carefully by considering past and present performance of the fund and fund house, history and performance of the fund manager and compare with peer performance to identify the best one. Always keep in mind that the present better performance should not required to continue for future. Monitoring fund portfolio and timely action to balancing is a required to build a healthy portfolio and achieve the financial goals.

Click Here to see Seven common blunders in the mutual fund selection

3. Life Insurance – Remember insurance is inherently long-term in nature. Especially ULIP’s are long term investment (10 or more years) by nature and it is not advisable to an investor with short term focus. ULIP’s charges are comparatively high and the returns from ULIP’s entirely depends on stock market. An investor with time focus of 10 years or more, ULIP’s are the best investment instrument.

The earlier you take an insurance, that is better. Compounding can be achieved by saving early. As an instrument for long term capital appreciation, it is a great idea to stay invested through the whole tenure.

Click here for a comparison of Mutual funds VS ULIP's benefits

Click here to know the correct selection procedure of a ULIP

4. General Insurance – One should have well understanding of the coverage, exclusions and claim process before buying the general insurance policy. Must consider the post-sales services from the insurance company and gauge what you brought. A better track record of claim settlement is a must part to select a general insurance company. Read to identify and determine insurance, Click Here.......

5. Banking – Investor should understand the service what he required and what is available from the bank. Comparison of service with peer banks will always keep you to find out the best bank from the group. Reputation of a bank, service quality, qualified and trained staff is a must areas to consider to select a bank.

To know more about the banking services, this article will help you the maximum

Click here to know the types of bank account requirements for us as an investor

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