Invest in the stock market

I spoke to a young girl the other day, who had just started working her first job and she very proudly mentioned that she has opened a demat account. I said well, now what. She was looking for tips to invest. This is what most of us do, we want to excel in something which we are not good at. Investing directly into the stock market requires time, effort and money. Now if you are working or in business, you do not have the time to do this. So then just pay an expert and let him do the job for you. Whenever there is a leaking pipe in the house, you too can repair the leak, but you still call a plumber and pay him. But when it come to your own finances, you start being penny wise pound foolish. Instead of opening a demat account and trying to become a financial expect, let a financial expert guide you. This way you can spend more time on doing your best at what you are good at, be it your job or business.

One of the best things a financial advisor would suggest is Mutual Funds depending on your goal and time frame. Why Mutual funds? The main reason is diversification, no other fund will help you diversify your risk other than a mutual fund. The Fund manager’s job is to identify sectors and company’s which are doing well and will keep doing well. Whenever there is a downturn he knows when to get out. This helps you maximize your returns. If you look at most of the good funds, the fund manager would have beaten the benchmark. But to identify a good mutual fund is the job of the financial advisor. You can go by so many rating sites but all of them do the rating based on past performance. A good advisor would be meeting the fund managers and then making up his list of funds which he advises to his clients.

The advantage of mutual funds is that it is not just shares, but also bonds or debt funds. So you do not become a good investor by just opening a demat account and buys shares based on tips, It is a lot more, you need to beat the benchmark and be able to reach your goals in the defined timeframe. As I told the girl, your time starts now, you need to decide if you want to make or lose money or want to work towards achieving your goals, and the choice is yours.