Today there are dozens of reports and statistics from financial marketplaces and fund houses lauding the achievement of women investors. Interestingly, it is not just big-ticket-investors (like Ankita Vashistha and Debjani Ghosh) who take money-matters into their own hands. Reports show that among millennials, close to half of the population making investments are women.
Yet, women are entering a market that has been volatile in the recent page, and owing to commercial paper downgrades on reputed firms, has been subject to a degree of scepticism off late too. How can you, as a woman, overcome investment-related risks? Read on to know more.
Learn About The Market And Make Objective Analyses
Since you possess innate qualities like practicality and consistency that are ideal for investors, your next step is to capitalise on the wealth of information on making smart investments, which is freely available. The journey starts with learning about different instruments and how the market affects them.
For instance, mutual funds are subject to market fluctuations whereas fixed deposits are not. An FD for women offers guaranteed returns via fixed interest rates, which are quite high at present.
Other investment avenues are however, affected by external factors like the country’s economic scenario and crude oil prices, which affect equity shares. These interest rate fluctuations also affect the value of bonds. To illustrate, equity channels are predicted to gather direction and momentum only post the general elections, which means that you may want to consider safer options until then.
Diversify Your Investment Portfolio
Knowledge about the different investment channels available to you will help you build a robust portfolio. Diversification of investments allows you to keep risk at bay. You put your finances in a state of risk or low growth when everything is committed to one channel.
The portfolio mix that you choose is subject to your income, financial obligations and other factors that affect your risk profile. Studies conducted with respondents aged 18 to 37 show that while the equity and mutual fund portion of portfolios steadily grows with increasing income, channels like PPF, RDs, and FDs secure larger portions across incomes.
Keep a Sizeable Component In Liquid Assets
Having access to ample liquidity is always important, more so if you are nearing retirement. Experts advise that you keep at least a handful of years’ worth of liquidity in assets that can be quickly converted to cash. However, it is important to tread cautiously.
While stocks are considered liquid investments, you don’t want to land up with a financial scenario wherein you are compelled to sell your assets when the market is on a downward slide. This means there may be risks of incurring losses. Consider laddering fixed deposits instead. That way you can fix tenors to mature at regular intervals, which will lead to promised returns and sufficient liquidity.
Eliminate Credit-Related Risks
Your investment may also be affected by market fluctuations, and there are other issuer-specific factors that also matter. Internal factors like management systems and business strategies, in this regard, will influence the amount of interest you will earn on your principal at maturity. As an investor, you can make informed choices by paying attention to ratings by credit rating agencies like ICRA and CRISIL. These agencies evaluate varied parameters to rate an instrument.
For instance, IL&FS’ short term ICRA ratings were downgraded from A1+ to D. ICRA’s D rating signifies defaults at maturity. So, with information such as this at hand, you can invest with a company or institution that will pay you back reliably.
Make the most out of the natural instincts you have to invest wisely. Armed with these 4 practical steps to counter investment-related risks, you can enjoy a financially healthy future.
For investors seeking higher returns, Bajaj Finance Fixed Deposit offers a higher FD interest rate of up to 9.10%, which can help you reap the benefits of high returns. Investing in Bajaj Finance FDs can also help you safeguard your investment portfolio, and you can look for flexible tenors, options to choose your interest payouts.