Allocation of funds in the various investment portfolios and managing them efficiently is called portfolio management. There are plenty of options like real estate, equity shares, fixed deposits, gold bonds, systematic investment plans, and insurance policies when it comes to investment portfolios.
You may have a question in your mind –why portfolio management is important?
Benefits and advantages of effective investment portfolio management
An investor should do thorough research before investing his money in diversified investment plans. Unlike before, the investment options are vast. If you are not afraid of taking risks and fall under the risk-taker category, you should invest in forex trade, cryptocurrencies, equities, and ULIP policies.
You can expect maximum profits when you decide to invest in one of the above investment plans. However, mutual funds, equities, and ULIP are subject to market risks, and you should thoroughly explore the offer documents before investing your money in such plans. You can choose to invest in short-time and long-investment plans.
How to hire the best investment consultant?
You can find reputed organisations that offer professional investment consultancy services. However, before selecting the senior investment consultant or consulting firm, you should take a stand to explore the ratings, reviews, testimonials, and feedback of the service providers thoroughly.
You may also get a reference from your relatives, friends, and neighbours. Remember to explore the track records of the service providers before taking the next decision. It is safe to do exploratory works and research before entering into a contract with tax and investment consultants.
The factors to consider before entering into a contract with an investment consultant are listed below.
Types of services
You should explore the types of services offered by the investment consultant. Reputed investment consultancy firms offer premium services like insurance, real estate, tax, and investment services. You should give preference to reliable service providers who have decades of experience in consultancy services.
- Personal visit
If you can find local service providers, you can visit their workstations and discuss your long-term financial goals with one of the representatives. You can pose a series of questions related to real estate, shares, forex, currency, and insurance policies and choose the best investment plans that fit your budget.
You can get details like the consultant’s experience and maturity levels thoroughly only when you meet him personally inside the branch.
- Service fees
The investor should get details like application fees, service, and ancillary charges.
Time-tested channels of investment
Your capital or money will multiply and give you huge returns after a point of time when you invest in the following portfolios.
- National Saving Certificates and Government Bond
It is worth noting that national saving certificates issued by the post office and government bonds issued by the central government are risk-free investment that gives you the best returns in the long run. It is suitable for investors who are afraid to take the risk.
- Gold Savings Scheme
Gold deposits or savings schemes are increasingly gaining momentum everywhere. It acts as a recurring deposit where you have to invest a portion of money every month in gold harvesting schemes. You can choose one year, two years, or five years and pay monthly instalments till the contract comes to an end.
Once the contract culminates, you can buy gold jewellery using the money invested in such portfolios and enjoy profits.
- Life insurance policies
A salaried person can invest in term or whole-life policies, endowment, and money-back policies and get huge returns after a point in time. Pension and retirement policies are gaining popularity.
- Investing in stocks
Equity shares, preferences shares, and debentures are some of the stocks that are popular in India. An investment consultant will guide you to choose the best equity shares and charge reasonable broker fees. You should read the offer documents carefully before investing your money in such risky shares.
- Systematic Investment Plan
Systematic Investment Plan (SIP) encourages you to choose multiple mutual fund portfolios. You can open a SIP account through a trusted investment consultant and pay the monthly instalments. Then, you can reinvest or sell the SIP after fifteen or twenty years to get the best returns.
- PPF and NPS
The National Pension Scheme is an investment portfolio promoted by the government. Individuals who are 18 years and above can open a bank account and start a Public Provident Fund. You can invest a few hundred or thousands in this scheme and generate income after 15 or 20 years.
NPS is also a popular scheme where you must invest a few thousand every months till you reach 60 years of age. Once you reach your retirement age, you will start getting a monthly pension till you die.
Cryptocurrencies fall under unregulated markets. Therefore, it is a risky investment portfolio. However, if you invest wisely in digital currencies like bitcoin, you can get huge returns after a few years.
Now you have the answers to the question – why portfolio management is important? First, if you are earning huge salaries, you should start investing in one of the portfolios listed above to get the best returns.
You have to choose an investment consultant who understands your financial standing. Stay away from unknown agents or brokers since they may charge exorbitant fees.