Offering higher returns on investment, equity investments are perfect for investors willing to work with some amount of risk to net good financial gains.
When it comes to investments, fundamental logic dictates that the money you park in any option must fetch you good returns, depending on the maturity frame of that option. In terms of high growth investments, you need look no further than equity securities. However, most investors shy away from equity investments because they fear losing their money – equity funds carry more risk than debt funds.
Are you wondering if you should make an equity investment? The following factors should help you make the right decision:
* Certainly, there is an element of risk, but there is also higher growth.
Top-rated long-term investments in equity are the most preferred investment options for both risk averse and high-risk investors today. They offer a comprehensive exposure to a wide range of well performing stocks in India. The long-term equity investment invests your money in different options, while the long investment horizon irons out the element of risk to an appreciable degree. Thus, you get the benefit of high growth and also diversification.
* How much you invest depends on you.
There is really no compulsion to park large sums of money in equity investments. You have the freedom to invest only as much as you want to, which gives you the liberty to spread your money over different investment schemes as well. You can invest using an SIP (Systematic Investment Plan) to the tune of Rs 2,000 per month if you wish to start small. However, the advantage is that the SIP offers you full exposure to stocks despite the low initial investment. Later, you can invest a higher sum of money commensurate with your goals.
* Your fund house is there to see you through the long-term equity investment.
The advantage of buying the equity fund through a leading fund house, is that you are assigned an experienced fund manager who can keep your fund on an even keel at all times. The professional management of your long-term investment maximises your money’s potential and offers high growth in the long run. It also frees you from the responsibility of personally monitoring the fund yourself.
* Get tax rebates.
Equity investments, whether short term or long term, attract tax benefits every year. You should stay invested for more than one year, or sell the fund after one year, to be exempt from paying capital gains tax on the returns. The best tax efficient equity investment is the ELSS (Equity Linked Savings Scheme) which has a lock-in period of just 3 years and fetches up to Rs 1.5 lakh deduction under Sec 80C of the IT Act.
Keywords: long term equity investment, Equity Investment, Long term investment