5 tips for smart investing

The main difference between investments and smart investments is purely the decisions you make. It’s not enough to simply save money; you need to aim to create wealth. As a smart investor, you should let your money do your work and not the other way around.

Of course, market volatility does exist. But a few fundamental tips remain relevant for all time. By applying these simple golden rules that are followed by successful investors around the world, you can meet your smart investment goals. Let’s find out what they are. 

1. Start investing early

It’s said that the early bird gets the worm. Statistics bear this out. When you start early, you give your corpus ample time to grow exponentially due to the power of compounding (referred to as the ‘magic effect’). Even if you don’t have much to invest, an early start helps you create more wealth for yourself, leading to financial security. No matter what your age is, it’s never too late to start!

2. Invest consistently

Investing sporadically or just once a year isn’t enough. There are no shortcuts for creating wealth. If you want your money to grow, you must invest a set amount every month or quarter and maintain financial discipline. The longer you stay invested in the market, the more your returns. According to research, investing for 5-7 years in mutual funds has negligible chances of downfall.

With HDFC Bank Demat Account, you can open one instantly and start investing in just a few clicks! Other than being a fast and paperless process, it’s also one account for multiple investments. Thanks to NetBanking, you have easy and quick access to your investments and statements. What’s more, you can instantly redeem investment returns to your HDFC Bank account. Open your DigiDemat Account today!

3. Build a diverse portfolio

One of the first rules of investing is ‘Don't put all your eggs in one basket’. Of course, you can invest all your money into a single asset or security. If it performs well, nothing like it - your decision will prove to be profitable. However, if it does take a U-turn, you can lose all your hard-earned money.

It’s essential to diversify if you want to mitigate risk, develop a strong portfolio, and get a favourable return on your investment. This means holding a variety of investments across asset classes – mutual funds, gold, stocks, bonds, real estate, etc. The intention behind diversification is that if a single product doesn’t deliver the expected output, another one will, keeping the market’s volatility in mind.

4. Don’t chase the highest return

Successful investing or achieving financial goals doesn’t always mean chasing the highest returns in a short time frame. This is the wrong approach; it won’t help you achieve your goals or the purpose of better portfolio returns. Though you should try to get the highest returns possible, don’t use it as the only factor when you choose a fund.

The purpose of investing goes beyond earning the highest return. It’s also about easily and predictably meeting different goals and objectives that come up with time. As a smart investor, you need to focus on low-risk and steady investments over a period of time. 

5. Track investments regularly

It’s crucial to keep track of your money, as investments need nurturing from time to time. An effective way to keep a tab, track, and analyse performance is via a spreadsheet. List all your investments and review them periodically. With time, as your needs change, you can make amends along the way. 

Get going!

No matter where you are in life, it’s always a good time to start planning your financial future. By following these smart tips and enforcing self-discipline, you can form a robust financial management system to hold you in good stead in the future.  You can read more on how opening a Demat Account will help you plan your finances if you don’t have a financial goal.

​​​​​​​Looking to open a Demat Account? Click here to get started.

*Terms and conditions apply. This is an information communication from HDFC bank and should not be considered as a suggestion for investment. Investments in securities market are subject to market risks, read all the related documents carefully before investing.