All investment portfolios need growth. This growth, when occurring consistently over a long term, builds wealth for you. Equities are among the few asset classes that have the potential to give you good returns. But, direct equity investing requires skill, knowledge and patience and also comes with downside risks if you cannot monitor it regularly. You will need to know which stock to buy, when to buy, how long to hold, when to sell and keep track of news and market movements regularly. If doing all of this seems difficult, there is a simpler option. Choose mutual funds to do the job for you. In a mutual fund, it is the fund manager who decides where and when to invest. This means that you leave the choice of investing and managing downside risks to professionals. When you are ready to start investing, you may approach Standard Chartered to start an investment relationship. We will help you understand your risk profile and you can also view fund ideas in line with your risk appetite. In the alternative, if you are clear on the fund you want to purchase and understand the risk and returns, you can complete your purchase online, at your convenience, using our Online Mutual Funds platform. If you want to start off small and maintain a disciplined investing approach, use the Systematic Investment Plan (SIP) route for mutual funds. SIPs also help you ride out market swings – since you invest a fixed amount every month, you get more fund units when the markets are priced low and less units when they are high. This is the principle of ‘rupee cost averaging’ – this ensures that over a long period the effect of market swings on your unit cost of purchase is averaged out. As a thumb rule, if you are below 35, it is good to allocate a large portion of your wealth to equities to gain from the possibility of long-term capital appreciation. Mutual funds invest across various asset classes comprising both equity and debt. Hence, if you have goals that require wealth creation over a long term and are comfortable with the accompanying risk, choose equity mutual funds and invest in them online.
In every cricket team there are some swashbuckling batsmen and some who can hold the innings together. Likewise, every investment portfolio needs to have the stability provided by fixed income. As is clear from the name, fixed income or debt investments generate a stable source of income. You need to use fixed income stability to hold your portfolio together at times when equity markets are volatile. Choose from a range of bank fixed deposits, debt mutual funds, and recurring deposits. FDs give you guaranteed principal protection and returns in the form of interest, but are subject to default if the bank issuing them collapses. Debt mutual funds can give higher returns and better tax adjusted gains, but also have an accompanying risk if the issuer of the debt securities fails to pay returns on time . Recurring deposits are like SIPs in bank deposits.
At the core of all investment portfolios is capital. This capital or money is your hard-earned savings. You build a portfolio with this money by allocating it between growth assets and fixed income assets. But, what if you die tomorrow? What happens to the financial needs of your dependents like spouse, children and old parents? To get complete protection, you require an insurance cover. Insurance solutions, like term cover, health insurance plans and personal accident plans, protect you from possible risks. With insurance, your financial goals are protected. If something unfortunate happens, the goals can stay intact and be met. Standard Chartered brings you a range of insurance offerings from their insurance partners. Check out the range offerings here.
Markets may go and up down, but your wealth needs will remain. Use our tools and calculators to estimate your needs. Then, start the work of building the portfolio.
Your investment portfolio should contain different types of asset classes. This will give it a diversified flavour, resulting in a lower risk. Since we do not know which investment will do well in a particular period of time, it would be smart to allocate a certain sum of money to all of them. In this way, you will maximize your chances of building and growing wealth. Do not keep all eggs in one basket. Think long-term and build a solid investment portfolio!
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