Tuesday, January 11, 2022

What is Smart Investing and How Does it Work?

Smart investing can be understood to be an extension of the most basic elements of investing. It focuses on making appropriate investment choices keeping in mind an investor's specific needs. Choosing these appropriate investments with caution is important as they can help investors achieve their financial goals. As there presently exist a ton of investment opportunities in the market today it isn't too hard to end up selecting a financial product that may not suit your investor profile. Therefore, it is important to invest smartly and to carve out time to plan your investment journey.

Smart Investing

Some of the many virtues associated with smart investing are as follows.

  • An additional avenue of income is generated with the aid of smart investments
  • These investments allow you to achieve long-term financial security
  • Smart investments help investors create ample amounts of post-retirement wealth

If you are curious to know how smart investing works, consider the following.

Begin your investment journey at an early age

By investing at an early age, you can gain an edge over your counterparts. Early investing allows you to give your money more time to blossom into a considerable corpus. In order to do this, it is important to learn about how the markets work and methods to follow when investing such that you can take control of your finances. Consider visiting Angel One's Smart Money website as well as their Knowledge Centre in order to gain insights into the market and understand exactly how it operates with the aid of easy explanations. 

Be consistent with your investments

Smart investing entails consistent investments made over the course of several years as opposed to random one-off investments. In order for your money to grow well, it is important to consider investing a certain amount each quarter or month. By disciplining yourself in this regard towards your finances you can achieve your financial goals with greater ease.

Create a diverse portfolio

By diversifying your investments, you can reduce the extent to which you experience risk and mitigate financial losses that may otherwise arise in case of volatility within the markets. In order to make diversifying your investments easier, consider utilizing Angel One's ARQ Prime1 which serves as a rule-based investment engine that employs “smart beta”. What this means is that this engine makes use of time-tested rules to recommend value, quality, high momentum, and growth stocks such that investors can diversify their investments.

Compound interest is a powerful tool

Investors must always take advantage of the power of compounding. Time serves as one of the most lucrative opportunities that investors ought to take advantage of. With regards to building wealth, investing alone and earning returns on the same may at times be insufficient. Reinvesting the interest derived, however, can help generate far greater sums of money thereby allowing for the creation of a solid financial portfolio over time. 

Consider theme-based investing

Theme-based investing is particularly useful for those that aren't well versed with the markets and require help. Angel One's tie-up with smallcases2 enables investors to examine market themes and consider strategies based on which they can make appropriate investments. With each of these investments, it is possible for investors to build diversified, long-term portfolios for a reasonable price.

Enhance your holdings and consider the global markets

An important aspect of smart investing entails holding investments in overseas markets as well rather than being solely dependent on the Indian stock markets. Angel One recognizes this and has therefore partnered with Vested3 thereby making it possible for investors to invest in global markets. This offering allows investors to make use of zero commission investments as well as fractional investments. The value of fractional investing lies in the fact that investors gain access to stocks they might otherwise not be able to afford. Such investments serve as a great start for those new to the markets and make for good stepping stones.

Final Thoughts

With the resources available today it is possible to brush up on your smart investing skills and begin an investment journey of your own. The Angel One website for instance functions as a great tool that offers visitors several exciting resources aimed at enhancing their knowledge of financial markets and provides insights into the realm of investments. Regardless of what you ultimately choose to invest in, an important rule of thumb that governs smart investments is doing adequate research and investing in line with your financial goals.

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Disclaimers

  1. ARQ is not an exchange approved product and any dispute related to this will not be dealt with on the exchange platform
  2. The small case facilities are offered by the SEBI registered entities. Angel One Ltd. is just acting as a distributor of all disputes with respect to the distribution activity and would not have access to the exchanging investor Redressal Forum or Arbitration mechanism
  3. Vested is not exchange-traded products and Angel One Ltd. is just acting as referrer all disputes with respect to the distribution activity would not have access to exchange investor Redressal Forum or Arbitration mechanism