Steps To Successfully Invest In Equity

Investing is not as complicated as it looks if you follow the right methods to invest. It’s actually pretty simple; you’re basically using your money to work for you so that you don’t have to work overtime to increase your earning capacity. You can invest in stocks, bonds, mutual funds or real estate, and they don’t always require huge investment, contrary to popular belief.

Step 1: Getting your finances
Investing without knowing your finances is like jumping into the deep end of the pool without knowing how to swim. Apart from the cost of living, payments for credit card balances and loans can reduce the amount of money you have to invest. Fortunately, investing doesn’t require a significant sum to start.

Step 2: Knowing The Basics
It’s not necessary to be a financial expert to invest, but you do need to be aware of some basic terminology. Knowing the differences between stocks, bonds, mutual funds and understanding complex terms like Private Equity Fund is also important. One should also be aware of financial theories such as portfolio management, diversification and market efficiency. Books written by successful investors such as Warren Buffett or reading basic tutorials are of great help.

Step 3: Set Your Goals
Once you have calculated your investing budget and have knowledge of the basics, it’s time to set your investing goals. Each investor comes from a different background and has diverse needs. Safety of investment, income and capital appreciation are some basic factors to consider. Your choice of investment will depend on your age, requirements and personal circumstances. A 45-year-old business executive and an 85-year-old widow will have very different needs.

Step 4: Knowing Your Investing Style
Many first-time investors find that their investing goals and risk tolerance are not aligned with each other. Conservative investors generally invest majority of their money in low-risk, fixed-income securities such as Treasury bills, and dedicate a small portion to blue chip equities. While ambitious investors look for securities with high risk and high return.

Step 5: Finding The Right Broker Or Advisor
The type of broker that is right for you depends on the amount of time you want to hold your investments for and your risk tolerance. It is important to choose the right advisor. If you’re looking to invest in private equity, go check out the Everstone Linkedin profile. Factors to consider include their reputation and performance, how much they plan on communicating with you, their charges and what additional services they can offer.

Step 6: Taking A Decision
This is the most crucial part: choosing the investments that will become a part of your investment portfolio. In case you have a conservative investment style, your portfolio should include low-risk, income-producing securities such as federal bonds and money market funds. If you are looking to invest in a private equity fund, India is the right place to invest. Crucial concepts here are asset management and diversification. Choosing the right market for your investments is also very important.

Step 7: Adjustments and Review
This is the final step in your investing journey. Once you have worked out an asset-allocation strategy, you may find that your asset preferences have changed. The market value of the securities within your portfolio may have changed. So your portfolio needs modification. This can be done easily through rebalancing.