India has a rapidly growing middle-class population base, expected to reach 200 million by 2020. It is an opportune time for the finance industry to come forward and display their products, or financial instruments for investments.
The rising incomes are creating a demand for financial services. If you look at the statistical graph, we have slowly and conveniently accepted the new norm of paying EMI’s-at an interest rate which has only been increasing. Then there are loan requirements for home loans, education loans, and personal loans offered at different interest rates.
Besides, there is a lot of action happening with investment in growth funds. Many people have resorted to investment in stocks and mutual funds investments. There is a need for a financial advisor at this time. Many startups are offering this service to help you manage your personal investment portfolio. It can be a simple process of calculating the ROI or being more aware of what instruments are you investing in.
Let us take an example of a middle-class home which has a savings of $500 which can be converted into investments. Does he need to invest all the money in government securities, or how much money can he invest in equity? If we choose to invest using a particular financial instrument, it is always wise to understand its long-term implications. While some of us do our homework, others can also keep themselves updated on market-related equity investment by being in touch with a fund manager. The subject to market risks disclaimer in mutual funds can be better understood by making yourself more aware.
What drives a fund manager to invest X amount of money in Y or Z stocks a mix-n-match of your funds invested in equity. A fund manager will help you diversify your money using various financial tools. How many such tools are available in the market? What will give you better returns-holding stocks in large companies or mid-sized companies? It is the fund manager who will be your trusted aid, helping you understand your risk cover after doing predictive analysis and studying extensive data.
It becomes difficult to learn as also your funds become harder to grow in certain situations. At the time, you can get a better return on your investment when inflation is high, as a result of which the stock value is low. It’s an excellent time to buy shares. On the other hands, during the time of rupee devaluation, it is unlikely that your investment in software stocks will yield good results anytime sooner.
A fund manager will also help you understand your expenses on investment in detail. The high trading and administration costs attached to small cap funds, even when the stock value is high, may not accede to your expectations.
It’s the mix and match game by the portfolio manager. A 100% risk management is a better bet as compared to a 9% fixed rate of return on savings.
