HOW TO START INVESTING FOR BEGINNER

Investment is an asset created with the intent of allowing your hard-earned money to grow and multiply your wealth. You can start investing in with as little money to get you started but investing monthly or consistently will help you in the long run. Investment, when started young, is one of the best ways to see a solid return on your investment. Thanks to compound earnings, which means the return of your investment starts earning its own return. The beauty of compounding is to allow your account balance to snowball over time. Nevertheless, it's never late to start investing for a robust and secure financial future. 

As a newbie to the world of investing, you may want to know. How to get started, or how much money you need to invest. What are the best investment strategies for beginners? Here are some tips to start investing.

BEST ASSET TO INVEST FOR BEGINNER  

Ideally, people should invest in an array of instruments with the intent of diversification of risks. As they say, all eggs should not be put in a single basket. We classify the different types of investment available for beginners - NPS, PPF, Stocks/Equity, Bonds/ Debt, Real Estate, and Gold. Before making any investment, it's important to understand each instrument and how much risk it carries. It is also good to assess how much risk you can tolerate. Here are some top investment ideas to help you answer those questions.

NPS AND PPF

While investing in different instruments/Assets one should always look into the liquidity of the assets invested. NPS ( ROTH IRA), and PPF (401 (k)) are long-term investments. Hence these should be invested in for your long-term objectives. Returns in respect of PPF are assured by the Government and investment into PPF and NPS to a certain extent also helps one to save taxes on Income. NPS investment instruments are for pensions and beginners should always invest in them.

STOCKS/ EQUITY

Beginners may also consider starting investing in Stocks. A Stock is a share of ownership in a company. It's purchased for a share price. A share price can range from a single digit to a couple of thousand dollars. Generally, when a company performs well, the value of the stock grows. And when the company doesn't meet the expectation well, it goes down.

 However, equities also known as shares are influenced by multiple factors and are complex. I recommend beginners should buy shares through the mutual fund route. Depending upon your risk appetite you can begin investing in hybrid instruments which are an ensemble of debt and equity. The investment in these instruments would give a study growth to their investment.

DEBT INVESTMENT/ BOND

The other route of investment is an investment in debt. There are several debt investments in the market. There are liquid instruments. Some instruments can be encashed overnight but do give sturdy income. But the best way to invest in them would be through investment in the mutual fund route. The debt instruments are less volatile than equity and in long-term investment, give a sturdy and good yield covering the inflation.

REAL ESTATE AND REITs

The other investment arena could be an investment in real estate. The only problem with real estate is that they are not readily liquid and amount to overheads such as registration, stamping, etc. However, if you have extra savings to spare, these instruments often result in good returns, but as foretold only concern here is illiquidity and overhead expenses. Investing in them helps in the distribution of your risk.

One better option for investing in real estate is investing in REIT (Real Estate investment trust). This option gives you the avenue to participate in Real Estate without its inherent negatives. The overheads in this investment are negligible and, the investment is very liquid as listed on the stock exchange. Another advantage is that you can invest in a small amount, unlike in real estate where you have to invest a large amount of money at a time. However, you need to study the underlying real estate in the concerned property. Further, Long Term Capital Gains are available on the units purchased in the REIT. Thus the REIT is a good investment decision.

GOLD BONDS AND ETF

As foretold, we should endeavor to diversify our assets to distribute our risk. Therefore another Asset that we need to look into is Gold. Gold is an asset where there is a good chance of appreciation always. Give below are the details of Gold since 1970. From this, the reader would be able to appreciate Gold as an investment asset.

Yr.	Rates Rs./10gm.	Yr.	Rates Rs./10gm.	Yr.	Rates/10gm.	Yr.	Rates/10gm.
1970	184	1985	2130	2000	4400	2015	26343.50
1971	193	1986	2140	2001	4300	2016	28623.50
1972	202	1987	2570	2002	4990	2017	29667.50
1973	278.50	1988	3130	2003	5600	2018	31438
1974	506	1989	3140	2004	5850	2019	35220
1975	540	1990	3200	2005	7000	2020	48651
1976	432	1991	3466	2006	8400
1977	486	1992	4334	2007	10800
1978	685	1993	4140	2008	12500
1979	937	1994	4598	2009	14500
1980	1330	1995	4680	2010	18500
1981	1800	1996	5160	2011	26400
1982	1645	1997	4725	2012	31050
1983	1800	1998	4045	2013	29600
1984	1970	1999	4234	2014	28006.50

Investment of Gold as an asset should never be done in jewelry because this investment would also be including the making charges of the jewelry. Therefore, gold investment should always be done either in gold bonds of Govt. of India or gold ETF. Gold bonds have an advantage over others in that GOI pays interest @ 2,5% per annum paid bi-annually but is less liquid, and is saleable only after 5yrs. If held up to 8 yrs. then it would not attract Capital appreciation Tax. However, Gold bars/ Gold ETF/ Sovereign Gold Bond should preferably do those investing in Gold.

Your investment strategy depends on your saving goals, how much money you need to reach them, and your time horizon. There are various ways to invest in the market which give a good return on investment. Before investing in any assets, one must have got a good understanding. You can also consult a financial consultant for a fruitful journey into investments.