How to Pick Your Investments?

Over the course of the lockdown, India saw an uptick in the number of investors. This is because, over the years, many new investment opportunities have come forth and investors are willing to put their money in them.

For those who are just testing the waters, or for those who want to expand their portfolios, there is a plethora of investment opportunities available. But it is crucial to pick the ones that work best for you. 

Here are a few ways you can pick and choose between the best available investment opportunities. 

Criteria To Choose Investments

Before planning an investment profile, review your investment goals. Divide your proposed investments between cash, fixed-income from alternative investments, securities, and shares (equity). The breakdown of your asset allocation ultimately depends on your risk tolerance and expectation of the returns. A conservative investor may opt to hold 80% of the portfolio in fixed-income and 20% in equity. The reverse could be true for an aggressive investor, while a balanced investor might follow a 50-50 combination.

The deciding factors in making an investment choice stems from underlying factors and investment strategies. Picking the right instruments that suit your risk profile and goals is the key to good returns. Let’s take a look at a few of them.

Underlying Factors

Each investment platform in India needs to be analyzed thoroughly as part of the investment filtering process. Some important factors that need to be considered are:

• Tenure

 Evaluate the various investment opportunities in India from the angle of return and growth in the short-term and long-term horizons. 

•  Goal

A clear-cut financial goal for your investments is necessary. Building a corpus for a child’s education, buying a house, planning for retirement, etc are strong reasons that compel you to delay instant gratification and invest money. 

• Liquidity

Cash is the most liquid investment but it comes with no return or growth. Some investment opportunities in India like real estate may provide higher returns without providing liquidity but long- term high returns. Keep short term investments for liquidity and create long- term investment for high future returns 

• Risk 

Risk is arguably the most critical factor when analyzing both short-term and long-term investments. However, a choice of low- risk alternative investments on Grip brings steady monthly returns.  Ideal for the appetite of a conservative investor, this investment opportunity invites low ticket size investment in some of its best products.

Investment Strategies

Investing your money without an investment strategy is like entering a boxing arena without a game plan. An investment strategy will help evaluate your strong and weak investment performance and draw your focus on low- risk investments helping you in scaling your investments steadily instead of losing on high- risk volatile investments.   

It is also important to quantitatively figure out your goals. Having a corpus of a certain amount to retire by a certain age is a specific and quantitative investment strategy. 

Try out multiple investment opportunities as diversifying your investment portfolio will  help in better wealth creation. Low risk alternative investments are the most trending investments of our time. You can take a look at some of the short- term investment opportunities on Grip. 

• Value Investing

Grip offers commercial real estate and startup equity investments. These could be apt examples of value investing. Your investments mature with time into high returns. However, in commercial real estate investments, you start receiving a quarterly value on the principal. 

• Income Investing

Income investing involves buying securities that generally pay out dividends and return regular fixed income. Bonds, asset leasing, inventory finance on Grip provide steady monthly returns on your investment. 

• Growth Investing

Growth investors focus on companies that generate above-average growth, through revenues and profits. Investing in startup equity through Grip will help you to invest in smaller companies that have high potential for growth.

• Small-Cap Investing

As the name suggests, small-cap investing involves low-ticket short- term investments for a maximum of 12-36 months. Making monthly return possible for investors, these investments on Grip yield up to 21% pre- tax IRR. 

• Socially Responsible Investing

Startup investment is a great way of supporting the startup ecosystem. From financing inventory or leasing assets for promising startups investors earn good returns. This contributes to supporting a healthy startup community through startup equity investments, investors can raise money through crowdfunding, to earn high returns. Learn more about these investment opportunities on Grip.

To conclude…

Perform a technical and fundamental analysis of all your investments. Evaluate the performance of other potential investments that you wish to invest in. Study them closely until you understand how they work and help you in touching the financial milestones you have set. Once you are fully convinced, choose the investments that add the right value to your investment portfolio. For guidance on investment plans visit https://www.gripinvest.in/ to understand the scopes of alternative investments better.