While putting across your savings in different kinds of assets and funds it is important the investor understands what he is trying to achieve from the investment, is it a long-term goal which he is trying to hit, or is it a short-term goal he has in mind?
The aim of the investor will finally decide which are the kinds of financial instruments he will invest in. The aim of the investor will decide upon the investment strategy which will be taken by him. Rather than putting all the eggs in one basket, it is always advised to have a diversified portfolio to lower down the risk to be taken while making any kind of investment in equity or bonds or in the debt market. Share market profile is a good company that runs courses on share market training in Chennai. They update their fellow students about the latest methodologies to diversify risk and create a portfolio that can earn a premium out of the investment made.
Asset Allocation According to Risk-Taking Capacity and Age
Determining the different instruments and assets in which the investor would make his investment would be decided by the risk-taking capacity of the investor and the age group to which he belongs. The risk-taking capacity of a young boy straight out of college is much more than that of a man with retirement just around the corner. The person with retirement looming in his mind will be extremely conscious regarding the instruments in which he parks his funds, it would be more into fixed income instruments and will be a passive investor as he knows he does not have enough time to recover his losses. However, a young man who has a working life of over 30 years will dive deep into risk and be an aggressive investor and try to earn dividends out of equity investment which is of risky nature. He knows he has time to recover even if he goes through deep losses. Usually, people in the higher age group put their savings in bonds or debt instruments and their equity investments are pretty low. People of lower age groups usually put the maximum funds in equity to maximize their profit and book maximum dividends. Share market profile helps their students to understand the risk-taking capacity of individuals of different age groups and build an ideal portfolio accordingly. This makes their share market training in Chennai as the most sought out online course for understanding the aim of an investor.
Rational Division of Portfolio and Achieving the Target
An aggressive or passive investor needs to diversify his portfolio to mitigate risk under all circumstances. For example, an aggressive investor who is focusing on equity investments needs to understand that he needs to diversify his investments across different industry sectors and needs to look into their return for a specific period of time and study a sector’s market capitalization and their returns for a time frame. While he zeroes down on a share of a company, he also would need to screen the performance of the competitor companies and the kind of returns they have given to their investors for a time period.
Similarly in the case of an elderly person who is looking for a safer net to earn dividends on his savings needs to diversify into government debts and corporate fixed-term bonds and finally achieve the target of earnings that the investor has in mind. While selecting a bond the person needs to keep in mind the lock-in term period associated with it and check on the rating given to the bond before investment. Share market profile with their share market training in Chennai helps the investors in diversifying their fund and achieving a satisfactory earning on their savings through investments in stocks and bonds.
Assessment of an Existing Portfolio
An existing portfolio needs to be assessed for each instrument on a weighted average method and needs to be checked, what is the amount of money that has been allocated to it versus the total investment in the portfolio. The investor also needs to check over a period of time the amount of dividend or profit he has earned from them. If a certain instrument needs to be shuffled as they have not performed as per the prediction or expectation or due to market turbulence the investor should not hesitate to shuffle his investments to prevent future losses. Similarly, in today’s turbulent atmosphere people might have a varying risk appetite at different points of time. So, making necessary changes in one’s portfolio is always advisable.
It is always advised to go through the opinions expressed by experts across different chat shows and television channels which give a fair view of the current stock market scenario, trends, and the sentiments of the customer. Changing political scenarios and effect on different financial instruments is also discussed in such shows. Share market profile equips investor to build their own portfolio and keep an avid watch on each investment through their share market training in Chennai. To get in touch with them click on the link www.sharemarketprofile.com.