Where should Young investors invest in 2021

Just started getting your regular paychecks and want to know where to put your money where it can work like you do to grow? Get the answer to this and check the best investment ideas for young investors.

Millennials today often have a habit of living paycheque to paycheque. This results in their investments taking a backseat as they would rather live their life king size. Though, it is a good idea to pamper and spoil yourself from time to time, it is quite reckless to spend your entire income on frivolous activities. An individual must always save a part of their income and invest in different types of investment that cater to their investment needs. This article talks about different investment options that you can consider investing in 2021. Read on to know about these investment options.

Equity and equity-related instruments

Equities are a good option for investors who wish to invest for a long duration and fulfil their long-term investment goals. Equities are one of the best investment options to create wealth in the long run. As with equities, an investor usually invests for a prolonged duration, the power of compounding is able to work its magic at its maximum potential. This means greater returns for investors. Thus, equities are ideal for young investors who have the necessary time in hand to attain their long-term objectives.

Debt securities

Certain debt securities such as short-term debt funds or liquid funds should find a place in your investment portfolio as well. These investment options are ideal for preserving your wealth. Debt securities are also ideal for conservative investors who do not have the stomach to the volatilities and uncertainties in the market. If you are a new investor, who wishes to expose yourself to debt securities, then you might consider investment options such as debt funds or commercial papers (CP) that have an investment horizon of five to seven years. These investment options should ideally take up to 35% of your total assets.

Rebalancing for portfolio

After deciding the asset allocation strategy for your mutual fund investments, it is also necessary to review your investment portfolio on a periodic and regular basis. This will aid you in rebalancing your equity to debt ratio if it gets twisted. If you are new to the investing world, you might want to stick to the basics of rebalancing and asset allocation strategy.

Sector funds

If you wish to maximise returns on your portfolio and expose it to sector funds, you must properly do your research and invest in the right sectors. Healthcare and finance are good sectors to focus on. Also, as Indian customers' spending and discretionary consumption patterns are rapidly evolving, consumer and consumer-tech have huge potential for exemplary gains in the future.

Tax-saving mutual funds

If you wish to invest in mutual funds that help to generate wealth and also help to save tax, you should invest in tax-saving mutual funds or ELSS (equity-linked saving schemes) mutual funds. ELSS funds invest at least 80% of their assets in equities and equity-related securities. Investments in ELSS funds are eligible for a tax deduction of up to Rs 1,50,000 as they are a part of Section 80C investments.
Whatever investment option you consider for your portfolio, make sure that they serve to achieve your financial goals. Additionally, they must align with your portfolio's investment horizon and risk profile. Happy investing!


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