Investing is not easy. It is both an art and a science. In a country like India, where there are multiple investment options, different tax treatment for each option and various ways to do your investment, it becomes even more complex to decide your investments. Here are some smart investment tips to follow while you want to invest in India:

Keep in mind your time horizon: First and foremost, you should know your time of investment. This is because investment avenues differ depending on the time you want to stay invested. This is true in most cases, except there is something exceptional like a sudden bull run in the stock markets. Equity investments should be preferred for the long term. If you want to stay invested for a period of 3 years or less, it is better to opt for debt instruments. The time of your investment in turn depends on your goals timeline.

Risk and reward are related: For any investment, risk and reward are related. An investment which offers high returns is more risky. A good example for this is equity investments. On the other hand, if an investment is less risky, like a fixed deposit or a debt mutual fund, the returns you get will be comparatively lower. It is important to ascertain the level of risk you can take for your investments before investing. Look at both the risk appetite and the risk tolerance level. Risk appetite refers to the willingness to take risk, while risk tolerance takes into account your age, liabilities, financial situation, etc. Investing in India requires an understanding of both these factors and also consideration of the related returns.

Do your research well: Doing your homework on your investments is very important. Before you invest, you should first consider the tenure, risk and return expectations. The various investment options in the market should be researched keeping these important factors in mind. Even within the investment option, you must compare the different avenues where you can invest your money. For example, if you wish to invest for tenure of 10 years and therefore want to invest in a mutual fund SIP, you should research the various mutual fund schemes as well.

Do not invest simply to save tax: An important investment mistake most investors in India commit is to choose their investments based on the need to save tax. If your investment choices are made only based on reducing tax, then it may not serve to fulfill your goals. Your investment objective should be to meet your goals. So first, map out your goals and the time available to fulfill the goal. Thereafter, decide your investment option. If this can be used for tax purposes, then all the better.

Review regularly: Last, but definitely not the least, you should review your investments regularly. Many people make their investments right, but because they do not review their investments regularly, they are not successful in getting the maximum returns. Having said that, it is also not advisable to keep changing your investments without any reason. The mark of a smart investor is to review investments regularly, at reasonable time frames and take a wise decision whether to hold or sell the investment.