[Equity Series]

Session 4: Things to Remember While Investing in Equity

We are glad to have you with us for our 4th Session on Equity – and that is Things to Remember While Investing in Equity

Alright so let’s get started...

Equities are high risk-high return investment proposition. Hence, you ought to…

Check your risk appetite and risk tolerance

In order to check your risk appetite and risk tolerance, you need to consider...

  • Your Age: Lesser your age, higher will be your risk appetite.

  • Your Income and

  • Your Expenses are a key determinant of your risk tolerance level while investing in equity.

  • Assets & Liabilities that you may have.

  • And Your Liquidity needs are of significant while judging your risk tolerance.

  • Moreover, your Past experiences in equity investing will have high impact on your investment decision.

  • and the level of Knowledge you have of the equity markets is vital to understand the risk you may want to take.

Do not forget to

Add Diversification in Your Portfolio

Why Invest in Equity?
  • Diversification is one of the basic tenets of investing.

  • So if you diversify your portfolio well. It will help you clock appealing returns with lower risk.

  • You can Invest in equity mutual funds with robust fundamentals, and promising future..

  • Investing in equity can reward you in two ways – Dividends and Capital Appreciation.

  • But while doing so, you should Take care not to over-diversify your portfolio as it can go on to diluting your returns.

And more importantly...

Invest for long term

Why Invest in Equity?

  • While investing in equities, you should have a long term investment horizon of say at least 3 to 5 years. The longer the better!

  • Good business strategies need time to pay back. Hence give your investments time, but ensure that you invest in sound businesses and be patient!

  • Long term investing can help even out volatility which will Reduce your risk and increase the margin of safety.

Finally here are 5 lines of wisdom from the legendary value investor, Mr Warren Buffet

5 Lines of wisdom by Mr Warren Buffet

He says

  • “Always invest for the long term.”

  • “If you don’t feel comfortable owning something for 10 years, then don’t own it for 10 minutes.”

  • “Never invest in a business you cannot understand”

  • “Risk comes from not knowing what you’re doing”

  • “Buy a business; don't rent stocks”

So to end our today’s learning exercise we now invite you to test your learning by taking up this simple quiz

Just Click on the link below