Today, many people are investing in stocks. But even if you have a tonne of money to buy and sell, you may not know where to start. This article will help you find the best place for your first investment.
In the world of investing, mutual funds investment plans have been a popular option for individuals. They are unique because they are invested in many different stocks to maintain stability and ensure overall growth.
Despite their variety, there is generally one goal: to maximise your return on investment. However, this doesn’t happen overnight or without much effort or due diligence (no one invests in something they don’t understand). It can be difficult to know where to invest your money. You want the best return possible, but also want to ensure that your investments are secure for the long haul. So how can you make an informed decision?
Investing in SIPs:
One strategy that might work for you is investing in SIPs (Systematic Investment Plans). These plans enable investors to buy small amounts of stock and reinvest dividends. They’re simple and tax-efficient, and they’re a great way of diversifying your portfolio without having to worry about picking individual stocks yourself.
Systematic investment plans are a diverse investment option, and they can help you take advantage of dividend payouts and low-risk dividend stocks. You’ll be able to avoid most of the drawbacks of trading in and out of stocks, which can be risky for long-term gains.
Where to Begin:
So now that we’ve established some basics about what SIPs (Systematic Investment Plans) are, you may be wondering where to begin. Should new investors buy a group of stocks that pay strong dividends? Or should they sacrifice a little in the short term for higher up-front growth?
The answer depends on two factors: how much money you have to invest and how risky you want your investments to be. If you’re feeling a bit more daring and want to take on riskier stocks, then it’s best to invest in stocks with higher dividend yields. If you’re not a risk taker, you should probably stick with the group stocks. Regardless of your investment strategy, it’s best to consult a financial advisor before investing.
Our recommendation would be to start with a SIP. Try to make the investment plan as simple as possible, with a fixed amount to invest and a set amount each year to reinvest. You should also consider purchasing some bond funds instead of mutual fund shares. These funds have less exposure to stock market fluctuations and are ideal for long-term investments that hold steady returns over the long haul (like bonds).
Remember: Money invested in SIPs has a nice combination of risk and growth potential, making them a great place for new investors.
Here Are Some SIPs In Which Beginners Can Invest:
1. Quant Active Fund:
It is a multi-cap fund that has an allocation of 40 percent growth and 60 percent value stocks. It currently has Rs. 3,480 crore in assets under management (AUM). The most preferred sectors for this fund are pharmaceuticals, consumer staples, materials, etc. Since its launch on January 1, 2013, this fund has delivered average annual returns of 21.17%. It also has an expense ratio of 0.58%, which is much lower than what most multi-cap funds charge.
2. PGIM India Flexi Cap Fund:
The fund has been around since 2015 and is invested across the equity and debt markets in a diversified manner. It has been consistently profitable, with an annualised return of 14.91%, since inception. The current AUM is 5,291 crores, and the most preferred sectors for this fund are financial services, automobiles, technology, etc. It has an expense ratio of 0.31%.
3. Parag Parikh Flexi Cap Fund:
Currently, it has an asset under management (AUM) of 28,546 crore. The fund is a balanced fund that invests in the equity and debt markets with an allocation to defensive sectors like consumer staples, energy, etc. Since its launch on May 13, 2013, it has delivered average annual returns of 18.88%. The most preferred sectors for this fund are financial services, technology, etc. When compared to other balanced funds, it has a higher expense ratio of 0.76%.
4. Kotak Equity Opportunities Fund:
The fund has been around since 2013 and is invested across the equity and debt markets in a diversified manner. It has been consistently profitable, with an annualised return of 16.68%, since inception. The current AUM is 11,662 crores, and the most preferred sectors for this fund are energy, capital goods, chemical sectors, etc. It has an expense ratio of 0.59%, which is lower than most advanced equity funds.
5. Edelweiss Large & Mid Cap Fund:
It is a market-cap-weighted fund with 79.61% of its assets allocated to large caps and 20.39% allocated to mid-caps. The fund has delivered average annual returns of 15.92%, since inception. The most preferred sectors for this fund are automobiles, financial services, technology, etc. It currently has assets under management (AUM) of 1,696 crores and an expense ratio of 0.48%, which is much less than what other large and midcap funds charge.
There are many options available, and you may decide to invest in the one that works best for you. The above-mentioned mutual funds provide tax-saving returns to investors in the long run. They provide investors with stability and growth. The returns are higher than investing in bank fixed deposits. Also, they are suitable for all types of investors, and they are the best option when you are new to investment banking.
By now, we hope you are convinced about the benefits of SIPs and that you’ll try at least one. If you need help, you can consult an expert like Piramal Finance for more information on SIPs and how to invest properly. They can help you with your investments by providing valuable information on mutual funds, including the ones mentioned above. Good luck and happy investing!