Two crucial terms in everyone's life are risk and return. You cannot achieve your life goals, such as owning a vehicle or purchasing a home with only regular income. To accumulate wealth, one must save money and invest it in return-generating investments. Each investment instrument carries a level of risk. As the saying goes, the higher the return, the higher the risk. Smart money management can reduce risk and ensure high returns.
What level of risk is considered to be safe? Investments that produce high returns, such as equity, are generally considered to be risky. The other end of this spectrum is extremely safe investments such as a bank fixed deposit and sovereign-backed investments. These investments are safe, but they offer very low returns. The best investment plan that delivers high returns and minimizes risk is one that guarantees high returns. While no investment is risk-free, you can minimize the risk by planning well.
It is essential to establish a minimum return level in order to start investing in the best plans that offer high returns in India. Let's take bank fixed deposit returns as an example of the minimum return we can expect. Bank fixed deposit returns are around 7% per year. An instrument must generate more than 7% per year to be considered a high-risk investment that offers high returns with low risk. Low-risk investments such as fixed deposits, recurring deposit and short-term debt funds can help reduce risk. Low-risk investments will not yield high returns. It is important to aim to invest in high-return instruments and to plan smartly to minimize risk.
Planning the deployment of money is the first step in achieving high returns and the best investment plans. This can be accomplished in four steps.
Regularly save and invest: You cannot build a corpus if you don't invest regularly. You should set up investments that will require regular contributions, such as a systematic investment program (SIP), or a recurring deposit.
Fixed-return plans: Don't leave your money sitting around. Once the money has been set aside for investment, it should begin generating returns. Investing in debt funds is a simple way to make sure your money doesn’t go to waste. Fixed returns will be achieved with short term debt funds.
You should wait patiently. The money you have set aside is earning a fixed amount in bonds funds but will not yield high long-term returns. You will need to be able to predict the market and move funds from fixed-return instruments to high return investments such as equity. This will improve your returns. Be patient before you invest in equity markets. You can only enter when it is most favorable.
Invest in high-return investment plans: You will need to program automatic switching of your corpus from debt funds into high-return plans to earn high returns.
It is important to ask what high return plans are. High return plans are a combination of best investment plans with high returns, monthly investment plans with high yields and short-term investment plans. India's best investments plans offer high returns and include value stocks, dividend-paying stock, sector funds, rental property, and sector funds.
You can narrow down a few blue-chip stocks to find the best value stocks. Then, start watching their prices. Stock analysis can help you determine the intrinsic value of each stock. Invest in the stock as soon as the stock price drops below the intrinsic value.
Stock market sectors have potential, but investors are not always keen to invest in them. The pharma sector, for example, was struggling for many years before the Covid-19 pandemic. You can identify such sectors and create a SIP to invest in them. You can also invest in rental income-generating real estate. Choose smaller dwellings because they are more affordable and in the best location.
It is not easy to earn high returns while minimizing risk, but it is possible. To unlock the best investment plan in India with high returns, you must create a plan that is feasible and follow it. It should also include a plan for an exit strategy. Remember that it is equally important to liquidate your investments when you are ready.