Equity, MFs and SIP planning tips for Retail Investors

Right from Rs 2.11 lakh crore recapitalisation plan for the public sector banks (PSBs) to announcing an outlay of Rs 6.92 lakh crore for road construction plan, steps are being taken to revive credit growth, generate employment and instill exuberance in the economy.

Retail investors must consider the following factors before investing in such a scenario.

Invest wisely: While equities seem to be an attractive investment option, a retail investor is advised not to base their investments simply on hearsay or tips from friends and relatives. Conduct a thorough research. Take professional help to take calculated risk.

Take the MF route: For those who are unsure of how to approach equity as an asset class for investment, MFs could be a viable option. The investor can opt for sector-specific funds to maximise returns at lower risk. Diversification offered by MFs will also serve as a cushion against any unpredictable movement in the markets. The investor can also invest via Systematic Investment Plan in mutual funds. SIP helps the investor to invest a small amount in regular intervals in a mutual fund scheme.

Be mindful of your portfolio: Any investment decision should be based solely on the investment goals, and risk capacity of an investor. Retail investors should consider investments in a particular sector only if such decisions strengthen their portfolio and are within their risk limit.

Stay invested: An eminent investment guru has rightly said, “Time in the market is more important than timing the market”. Temptation to make quick returns by investing in sector-specific stocks should be avoided

EYE ON GOALS

• Any investment decision should be based solely on the investment goals and risk capacity

• Consider investments in a particular sector only if such decisions strengthen portfolio