Why are you investing? This is the most crucial question you need to ask yourself before investing. Of course, answers may differ but earning something more or making income from money are few critical. In any case, where to Invest is an essential question as to the correct Asset allocation, or Asset mix is deciding factor.

One more question is, what is a minimum return from Investment? What is Risk supposed to take? You need to take care while making IPS (Investment statement)

Interestingly, I found an interesting tweet from one Respected person.

Check out  @NagpalManoj’ Tweet.
It was a poll. But the tweet highlights some factors we need to take care of while Investing.

  • It highlights the Inflation factor. The value of ₹5,00,000 will reduce with time. So if you want to keep that value the same, what minimum return do you need to earn? 7.5% around.
  • There is always a need for money from banks and financial institutions, so if you keep cash with them, they will give you a slightly high Return than inflation. So yes, you will make money but not sufficient. We Call them fixed income.
  • Next is gold. It is not an investment and hedge against inflation. Not applicable today, but before 1977, many Central Banks attached the value of gold and currency. So indirectly, say if you have 1 gr or pound of gold, there is a value you will guarantee by Central Bank like Fed or RBI. So it is good to keep them in the portfolio but not as investments. There are many ways to Hedge your portfolio. Gold is one out of it.
  • Last and most importantly. When someone manufactures something from Commodities or gives services, it creates wealth. Simply put, it will happen only with Equity if you want to make wealth. Just check the difference between the first and last options. It is sufficiently big. Here, only Sensex is taken as an option. But there are many more stocks that make more wealth than SENSEX. So please choose the right one and sell it at the right time. Repeat the process, and you will be rich.

It is going to end with thanks to Manoj Nagpal Sir. It’s all because of him; I am writing this post. I planned to write about it, but it wasn’t easy to present. So his tweet makes it easier for me.