Investment
Investment
Make it easier to plan Investments
Smart investment can solve many problems. It will help us to fulfill ourdreams and give us enough money for all the expenses. One should always investonly after taking advice from a financial expert. Smart investment is good foryour financial health as well as it helps to fulfil your dreams. So it isbest if we develop a proper investment plan to secure our future financially.
Here aresome of the importance and benefits of Investment planning:
Savings: One should invest in thoseinvestments that are low-risk. Funds can easily be taken out in case of anemergency.
FinancialUnderstanding: Aninvestment plan can help an individual evaluate their current financialsituation. Having a good understanding of your finances makes it easy for youto create or revisit your investment or retirement plan.
FamilySecurity: Investmentplanning is important for family security. If anything happens to the workingmember in the family, then other members will be financially secure by theinvestment they have made.
Efficientlymanage income: It ispossible to efficiently manage the income and expenditure of a person with aninvestment plan. Managing income helps a person to manage other expenditures,tax payments, etc.
Standardof Living: Themoney that is saved and invested can be used to supplement a person’s income inthe event of an emergency. For example, if the working individual in a familydies, then the savings can help support the family during such as time.
Investment objectives are the goalsthat an investor has for his/her portfolio. The following are some of thecommon investment objectives:
Income: In order to generate greaterincome, investors should invest in higher risk investments. Investors mustproperly analyze and evaluate their relative risk-return ratio before investingin an appropriate asset class. This will allow them to enjoy the benefit ofmaximizing returns.
Liquidity: Investments in stocks and bondsare liquid, meaning they can be easily converted to cash. However, theliquidity of these investments comes at a cost.
Safety: One of the main objectives of investment planning issafety in terms of money. It is also important to invest in safe investments.The money market is safer than bonds, but bonds have a higher rate of return.
TaxMinimization: Aninvestor may take up those investments in order to opt for tax minimization asa part of his investment strategy. For example, a rich businessman may want toseek those investments with favourable tax income in order to reduce tax.
Capital Growth: Capital gain is different from the returns in thatthey are only realized when the securities are sold at a higher price than theprice in which it was originally purchased. Selling at a lower price leads tocapital loss. Therefore, investors who want capital gains should invest in securitiesfor longer term.
