Rurash Financials Private Limited | Unlisted Equity Investments in India, Leading Stock Brokers and Stock Dealers in India

It’s no secret that the Covid-19 pandemic has caused major disruptions around the world, but at the same time, it has also led to a shift in investing habits in the Indian stock market, particularly among younger people. While this has a positive impact on the Indian economy, we also need to account that the market has been rocked by factors such as stagnant economic growth and the Ukraine-Russia war, leading to significant volatility. In fact, in the past quarter, the BSE Sensex and NSE Nifty have fallen by about 8%, causing investors to feel like they’re in the midst of a financial storm.

To weather the turbulence and reduce risk, investors need to understand their financial goals and create a smart investment strategy. This means maximizing gains and building a portfolio that can withstand market fluctuations.

At Rurash Financials, If you are an investor who wants to improve your financial portfolio and make the most of your money, there are plenty of steps you can take. From diversifying your investments to using tax-advantaged accounts, here are the top 23 tips that will certainly help you achieve your financial goals and revamp your financial portfolio big time:

  1. Be clear about your financial goals: The first step is always to set clear financial goals for yourself and use them to guide your investment decisions. A common financial goal in India could be saving for a down payment on a house, for which a person may aim to save a certain amount, such as 20 Lakhs INR over a period of 5 years.
  2. Start small: If you are a beginner, it’s wise to start with a small corpus. Investing in small amounts regularly can help you learn the ropes of investing without risking too much. You can start with as low as 1000 INR per month and invest in a low-cost diversified equity mutual fund through a Systematic Investment Plan (SIP). This way, even a small sum of money can be invested regularly to grow your portfolio over time. With the power of compounding, over some time, these small investments can grow significantly.
  3. Diversification is the key: Diversify your portfolio like a bee, gathering nectar from a variety of financial flowers (stocks, bonds, real estate, etc.). For example, a diversified portfolio could include investments in Equity Mutual Funds, fixed deposits, Real Estate, PPF, etc.
  4. Build your wealth over time: Use dollar-cost averaging to invest in the stock market and build your wealth over time. Dollar-cost averaging refers to investing a fixed amount of money at regular intervals, regardless of the stock price. Let’s say if an individual wants to invest in an Equity Mutual Fund using the dollar-cost averaging strategy, they can invest a fixed amount of INR 10,000 every month for a period of 5 years. This way, they will end up buying more units when the price is low, and fewer units when the price is high, which ultimately averages out the cost.
  5. Invest in mutual funds: Mutual funds are a great source to balance your portfolio and set you for high returns at comparatively lower risk than equity. A balanced mutual fund can have a mix of equity, debt, and gold with an expense ratio of around 1.5%
  6. Tax planning is a must: Don’t forget about tax planning. Use tax-advantaged accounts, like a traditional or Roth IRA, and consider speaking with a financial advisor about strategies to minimize your tax burden. Keep a check on a financial budget and various benefits available for capital gains. For example, Section 80C of the Indian Income Tax Act allows a deduction of up to Rs. 1.5 Lakhs from taxable income for investments in specified instruments such as PPF, NPS, Equity-linked savings schemes, etc.
  7. Expand your horizon: If you’re feeling adventurous, consider investing in individual stocks or even unlisted shares in startup companies. Just be sure to do your due diligence and understand the risks. Especially with Start-up India initiatives at play, this is a great time to leverage your investments through them. Investing in a start-up company early on can yield significant returns if the company becomes successful, but remember it also entails a higher risk.
  8. Don’t avoid insurance: Protect your investments and your family by having the right insurance coverage in place. For instance, a term insurance plan can provide a financial safety net for your family in case of an untimely death.
  9. Review and Restructure: Regularly review and rebalance your portfolio to ensure that it’s aligned with your financial goals and risk tolerance. An individual can review his portfolio every quarter and reallocate assets if necessary
  10. Do not neglect the expense ratio: Keep an eye on fees and expenses. High fees can eat into your returns, so choose investment products with low fees whenever possible, particularly while investing in mutual funds. A mutual fund with an expense ratio as high as 2% will eat up a considerable portion of your returns over the years.
  11. Personal finance and education: Stay informed about market conditions and be prepared to make adjustments to your portfolio if necessary. Invest in yourself by continuing to learn and educate yourself about investing and personal finance. Subscribing to financial magazines or following investment gurus on social media can be a good start.
  12. Retirement schemes: Take advantage of employer-funded retirement schemes like RPFs and EPfs and contribute as much as you can afford. For example, an employee can contribute 12% of his/her basic salary to the Employee Pension Scheme (EPS) which is then matched by the employer, in addition to availing tax benefits under Section 80C of the Indian Income Tax Act.
  13. Automate your investments: Consider using automatic investment plans to make it easier to consistently invest and grow your wealth over time. You can consider investing through Systematic Investment Plans (SIPs) to mitigate your portfolio risk. Suppose you can start by setting up a SIP for INR 5000 per month for a period of 5 years in a diversified Equity Mutual Fund.
  14. Consult a professional: If you are feeling stuck, do not hesitate to consult a financial advisor who can help you navigate your portfolio better. A financial expert can help you create a personalized financial plan that aligns with your goals and risk tolerance.
  15. Say no to emotional investing: Don’t be swayed by hype or emotion when making investment decisions. Instead, rely on sound research and analysis. Let’s say, if an investment is not performing well, it’s better to sell it, instead of holding on to it in the hopes of it bouncing back.
  16. Invest more for the long-term: Avoid trying to time the market. Instead, focus on long-term investing and let your investments grow over time. This helps you to curb market volatility and underrate the risk that comes along with it. For example, Investing in Equity Mutual Funds for a period of 5-10 years can help you to earn significantly better returns than if you were to invest for shorter periods.
  17. Use financial charts and tools: Always keep your financial tools handy and do not invest without carrying out proper research. You can use tools like stop-loss orders to protect against large losses. A stop-loss order is a type of order that is placed to automatically sell a security when it falls below a certain price, thus protecting the investor from significant losses.
  18. Emergency Funds: Setting up an emergency fund to protect your investments from unexpected setbacks is very underrated. But if you want to sail through difficult times, you must have enough emergency funds to meet your necessary needs. For example, having 3-6 months of living expenses saved in a liquid account like a savings account or a liquid mutual fund can serve as an emergency fund.
  19. Exit loss-making investments: Don’t be afraid to sell if an investment is underperforming for a very long time or no longer aligns with your goals. Such as if you have invested in a stock that has been consistently underperforming for more than a year, it may be a good idea to sell it and put the money into a more promising investment.
  20. Don’t exaggerate your risk appetite: In the desire for high rewards, do not overdo your highly-volatile investments. Moderation will help you sustain for a long time, not frivolity. If you’re risk averse, it’s better to have a lower allocation to equity in your portfolio, and instead invest in less risky assets such as fixed deposits, bonds, etc.
  21. Do not ignore traditional investments: It is exciting and rewarding to put your money in stocks and mutual funds. But if you truly wish to create a balanced portfolio, you must also keep in check traditional investments like fixed deposits, especially when they offer decent interest rates. The best part is that they entail zero risk. Let’s say a fixed deposit with a bank may offer an interest rate of 6-7% p.a. which can provide relatively stable returns.
  22. Clear your debts: Focus on paying off high-interest debts. You can use a 50-50 method to clear your debts. The 50-50 method is a debt reduction strategy where you pay off the debt with the highest interest rate first while making minimum payments on the rest of the debt.
  23. Be patient and watch: Be patient and stay the course. Building a strong financial portfolio takes time and discipline, but the payoff can be significant.

Enhancing your financial portfolio requires a long-term approach and a commitment to making informed, strategic decisions. By setting clear financial goals, diversifying your investments, and minimizing risk, you can increase your chances of building wealth over time.

At the same, you mustn’t be lurched by hype or emotions, and be willing to seek out expert advice when needed. With discipline and patience, you can create a strong financial foundation that will serve you well into the future. 

Take control of your financial future and start working towards your goals today. For any guidance regarding financial instruments, Connect with our relationship manager now or write to: