Top 10 Investment Strategies to Create Wealth

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Top 10 Investment Strategies to Create Wealth

  • 26th Apr 2022
  • 2,635

Top 10 Investment Strategies to Create Wealth

Investment is a very tricky trade today. Most investors want to make quick money with high returns and low risk. For the same reason, you will find many people on the lookout for the best investment strategy or options that can double their money without the risk of losing the principal amount in a span of a few months or years.

This may sound very lucrative and fascinating. But, the thumb rule of finance is “the higher the return, the greater the risk.” Thus, the possible existence of a high-return and a low-risk combination is negligible in investment products.

As an investor, you must be clear that, in reality, the proportionality of risk and return is direct. And also that any investment requires strategic planning and a predefined path for growth. If you miss out on investment strategies, you might not be able to yield maximum returns out of your investments.

In this article, we will discuss the ten best investment strategies you must look for before investing.

Best Investment Strategies to Create Wealth

1. Start investing early.

Investing early in life is an important aspect of gaining big in the long-run. Even the most experienced investor or highly qualified financial advisor won’t be able to tell you the “right” time for starting your investment. In reality, the time to invest starts as soon as you realize it. The general principle is to start investing when you can. The best time is now if you are capable. Initially, it might feel overwhelming, but you will get familiar with investment and the strategies in some time.

2. Choose an approach that you are comfortable with.

It is always suggested to invest in a long term plan to make the most out of it, and having long term investment strategies is the key to yield maximum returns from your investments. At the same time, it is also equally important that you are comfortable with the investment you have made. Based on your nature and thought process, you can choose to invest in high-risk investments like stocks or low-risk investments like traditional insurance.

Top 5 Investment Strategies to Create Wealth

3. Diversify

You must have heard a lot about diversification! And for a good reason, it is an important step in your investment journey. Diversification is an investment strategy that suggests not putting all your investment in one place, one plan or one type of investment option. Instead, it suggests that an investor should keep different investment types.

These were the three key strategies that you must consider as an investor; let’s talk about other important investment strategies that you must also pay attention to.

4. Prefer investment funds over individual shares

Funds are a collection of individual shares or bonds. You should prefer funds because it paves the way to access different types of investments across the globe, and they are cheaper. For example, suppose you want to invest in the best tech companies in the US; rather than buying individual stocks of each tech company, you may choose one fund that invests in US tech stocks.

5. Keep the investment costs low.

The lesser you pass your money for investment management and services, the more you save and thus increase the value of your return.

6. Keep regularity in your investment deposits.

It is said that “drops make an ocean”, which is the best investment strategy that an investor should rely on. You can also say that this is a key to a long-term investment strategy. All you have to do is never miss adding to your investment deposits. Even if the amount is small, you can build a decent amount for future in the long term.

7. Rebalance the investment plans.

Keeping the balance between all your investment plans in a proper ratio is suggested to avoid major losses. It is possible that some funds can earn you more while others stay stable with low returns. You must maintain a proper ratio of investment in all the plans.

8. Keep your emotions controlled.

Don’t get too excited and greedy in case of good returns. And in case of losses, don’t just give up. It is a part of the investment strategy to stay prepared for all the ups and downs.

9. Block noise that lures.

Many times you will see the market reacting to information flagged as harmful. As a long-term investor, it is advised to block such noises. Such trends are momentary and might hurt your long-term goals.

10. Be ethical

Never invest in unethical products. They might sound appealing and lure you with high returns, but they are highly dangerous, and you may incur heavy losses.

Keeping these strategies in mind and clearly understanding the little details of the plan you aim to invest in can help you achieve the best result of an investment. Be wise and make prudent financial decisions.

- A Consumer Education Initiative series by Kotak Life

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