A guide to investment for the 21st century women

Today’s woman is the definition of modern society. Most women in India are highly career driven and constantly strive to be self-dependent. Over the years, investment is increasingly becoming a buzzword for Indian women. Be it a working mother, a young girl just graduated from college, a homemaker, or an elderly woman, investment has always been the central focus of Indian women.

Moreover, women constantly visit investor education websites and try to keep themselves updated on the latest trends in investment. They are always striving to be well-informed investors.

Women brush shoulders with men in almost all walks of life. Women share the responsibility of children’s education and marriage along with their life partner. Moreover, they support their partner in running the family. Therefore, they are constantly in the lookout for investment avenues that multiply their savings and give them stronger returns.

Therefore, they must adopt a well-diversified investment strategy. Risks and returns vary with every asset class. This clearly means that each asset class will have the tendency to behave differently over time. Therefore, a major chunk of women investors should consider balancing of asset classes as a potent tool that provides them with strong protection against any major losses that could occur due to things not going as per plan in either a particular investment class or its sub-class.

The above strategy is called 'Diversification', which simply means spreading your total investment into different categories of investments which behave differently under a given time frame. The below 2 scenarios will help you understand 'Diversification:

  • When you invest 100% of your money in a Bank Fixed Deposit 

    No matter whether markets are going up or down, your 100% of money in Bank Fixed Deposit will grow slowly at 8-9% interest rate and will be unable to cope up with rising Inflation of around 10% (Inflation means rise in prices of all items like food, travel, goods, etc.).

  • When you invest 100% of your money in Stocks 

    When the stocks markets are going up, your 100% of money in stocks will earn more for you. When the stocks markets are going down, your 100% of money in stocks will decrease in value and cause you a big loss.  

  • When you invest 50% of your money in Stocks and 50% in a Bank Fixed Deposit  

    When the stocks markets are going up, your 50% money in stocks will earn more but your other 50% money in Fixed Deposit will grow slowly but constantly as per the interest rate. 

    In contrast, when the stocks markets are going down, your 50% money in stocks will decrease in value and cause you some loss but your 50% money in Fixed Deposit will continue to grow slowly & constantly as per the interest rate. Thus, your Stocks are helping you grow faster during good times and your Fixed Deposit is helping you remain stable during bad times.

Therefore, 'Diversification' helps you enjoy the advantages of all different investment categories and also protects you from the dis-advantages involved in any of them during a point of time.

To get your own Customized investment plan with Diversification suited to your investment time frame, simply use ' Looking for Expert Advice? ' section of Investmentz.com

Happy Investing!


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