Investors are continuously on the lookout to increase their ROI. The good news is that there are a handful of tried and tested methods that can help boost your returns. They let you stay ahead of the financial curve too and avoid terribly costly mistakes. These strategies have stood the test of time and can add success to your investment effort.
While profits are not guaranteed, below are a few next best things to do. Rest assured that the investment portfolio is likely to grow instead of sinking. Read on to know more.
1. Invest in Savings Plan
Pick a plan that promises high returns for long-term goals. It must be able to ensure steady growth and high liquidity. The best one mostly suits all types of investment needs and risk appetite. The top savings plan that you can consider are ULIPs, PPFs, Sukanya Samridhi Yojna, Mutual Funds and Senior Citizen Savings Schemes. These come with tax savings options as well. Disciplined savings can help you gain greater returns in the future.
2. Balance the Risk
Stocks and bonds may not earn enough to outpace inflation. But it is mandatory to invest carefully to be able to reach your short, medium or long-term goals. Taking the right amount of risk can go a long way to ensure a combination of safety and growth. But how to know your appetite? Well:
- factor in your age
- identify your financial necessities
- understand your attitude.
- focus on asset allocation
- strive for healthy diversification.
All of these can help boost the ROI. Know that not taking any risk at all can stagnant your portfolio. Too much risk, on the other hand, might result in losses.
3. Pay Attention to Taxes
Most long-term investments are meant to reduce taxes. So, make sure you know the capital gain taxes in India in stocks, gold, real estate or mutual funds for an informed choice. You may also opt for tax-free vehicles over taxable products like an FD to ensure better growth and sum assured at the end of the maturity periods.
4. Stay Calm During Market Volatility
How you manage your portfolio has a direct impact on the returns. The recent geopolitical tension between Russia and Ukraine and inflationary pressures have led to unfavourable market conditions. But make sure not to overreact and create an Investment Policy Statement (IPS) beforehand. Keep the emotions and decisions separate and follow this IPS. This way you do not let the markets dictate your actions. The investment remains on track and chances of disruptions are minimal.
5. Be Consistent
Consistency is the key to creating wealth. Make regular contributions without backing off even when the market is not in a good shape. This will help the investment grow faster and you may be able to tick off your financial goals earlier than planned. For instance, try not to exit your ULIP after the 5- year lock-in period and stay invested. A lump sum investment can help beat inflation too which is quite necessary in post pandemic India.
Make sure to read the terms and conditions well while buying online plans. It will help reduce silly errors and enhance your investment experience.