Novice investors are generally young and in the initial years of their professional life. Hence, they will have a long-term investment horizon. Having age and time on your side, a novice investor should look to make the most of their investments. We have covered the following in this article:
Starting to invest at a young age will let you utilise the advantage of long-term investment horizon to the fullest. As you have age on your side, you can go with an aggressive approach in your investment strategies. Even if something goes wrong, you would still have enough time on your side to recover and make good profits thereafter. Hence, starting to invest early is key to making the most of the investment opportunities.
s you have a long-term investment horizon, you can unleash the power of compounding by investing in mutual funds. Furthermore, you don’t need to have market knowledge. Mutual funds are professionally managed by fund managers who have an excellent track record of managing investment portfolios. Since you are a young investor, you can invest in equity funds as these are known to offer excellent returns in the long run.
Hybrid and debt funds are also a good option, but you would limit your returns by investing in these. If you are to save taxes, then you can invest in equity-linked savings scheme (ELSS). These funds are covered under Section 80C of the Income Tax Act, 1961, and allows you to save up to Rs 46,800 in taxes a year. ELSS mutual funds offer the dual benefit of tax deductions and wealth accumulation, which no other tax-saving investment does.
So what shall be the option for you guys?
