Every investor’s dream is to earn amazing returns on low capital investments! But people often think that every investment that gives high returns would be too risky. Well, that needn’t always be the case. Though investments mostly equate to returns, there are a few things to remember before jumping on any investment option. Here are 5 easy ways to ensure high returns on your investments.
Create a Diversified Portfolio
Are you one of those people who puts ‘all your eggs in one basket’? You will say, who does that now! We are always advised against relying on just one option and the same goes for investments as well. You can’t put all your money in one investment option. You need to look out for more options and invest in them, the scale and tenure of such investments will be dependent on your investment appetite.
Risk of loss is always prevalent in investments. Higher the returns, higher the risk. Creating a well-researched portfolio neutralizes this risk. This is also called Portfolio Diversification.
Converting Lust to Desire:
Let’s face it, high returns on investments is nothing but a lust for money and it is true that everyone needs more money. But never forget that lust is no means of making more money, instead it may lead you to losses. You can actually convert this lust to desire, a desire for earning more money and work with a plan while investing.
One should also remember that even though the steps should be calculative, you need to be brave and bold while making decisions. Buying a few stocks, mutual funds, some gold, or real estate every now and then will never serve the purpose. One needs to come out of the traditional investment options and look for modern, new and unique options like Alternative Investments. Read more about them here.
Keeping Expectations Real
Don’t be delusional about the investments you have made. It is mere luck at times when people hit it big in stock trading. Trading stocks is a long term process and requires lot of patience. They don’t always yield results and some stocks take as much as 15-20 years to substantially grow in value.
Don’t assume things about the market only from what you read or from one expert advice. You always need to verify such facts on your own and if you can’t, don’t deal with them. Basing investments on wrong assumptions is a futile exercise. While investing, you will experience ups and downs. You could maybe develop a theory of your own because that will be better than investing hard earned money on assumptions of other people. When in doubt, turn to your Financial Advisor for some sound financial advice.
Paid Advice is good Advice
As Apple CEO Tim Cook said, “If a service is free, you are not the consumer. You are the product.”
Every Bank, Mutual Fund and Financial company is out there giving free advice and suggestions on where to invest. Trust us on this: free advice is fatal. Most people dishing out free advice would be promoting their own product, feature or trying to sell you something.
If you have money and you are looking to invest without any prior experience, visit a financial planner and seek advice from them. They know the markets better than any book or single news article.
Look out for distressed sellers in real estate and stocks:
Consider this; right after the demonetisation drive towards the end of 2016, a lot of people were seeking an exit from their real estate investments. Many real estate portals too offered significantly low prices on properties. This was a great time for anybody looking to buy a house, especially if you were buying from a distressed seller who just wanted to offload their real estate investment. Such buys can be considered good for personal use but definitely not as an investment.
This applies to most of the large scale changes in economic and social policies. One should be aware of such happenings and more so about the implications of them. People who regularly trade stocks know that when everyone is selling stock due to some news or rumor, there are distressed sell of few stocks and they become a ‘hot buy’ before getting noticed.
Investors these days have so many investment options in the market to choose from. Remember that no single investment is entirely risk-free. Every investment has some amount of risk associated with it; only at varying risk and return rates. It is important that you read the fine print and do your due diligence before investing your hard earned cash. After all, nobody would want to get hit below the belt!