Investing can seem complicated, but there’s a simple rule that can help you make good financial decisions. This rule suggests that you should aim for specific returns on different types of investments: 10% on equity or mutual funds, 5% on debts, and 3% on savings in a bank account.

Here are the benefits of following this rule:

  1. Diversification: This means spreading your money across different types of investments. By following this rule, you’re encouraged to invest in a mix of equity mutual funds, bonds, and savings. Diversifying your portfolio helps spread the risk, so if one investment does poorly, it won’t hurt your entire savings.
  2. Risk Minimization: Different types of investments come with different levels of risk. equity mutual funds can be volatile, while bonds are typically safer. Savings accounts are the safest of all. By following this rule, you’re managing risk effectively, which is important to protect your money.
  3. Potential for High Returns: This rule encourages you to seek higher returns over the long term. While it’s not guaranteed, historically, equity mutual funds have provided the potential for higher returns compared to savings accounts or bonds. Over time, this can help your money grow.

However, it’s crucial to remember that your investment strategy should align with your personal goals, risk tolerance, and financial situation. Not everyone can or should follow this rule exactly. Some people might be more comfortable with lower-risk investments, while others might be willing to take more risks to seek higher returns.

Before you start investing, it’s a good idea to assess your own financial circumstances, understand your goals, and determine how much risk you’re comfortable with. You might want to consult with a finance professional to create a customized investment plan that’s right for you.

If you’re interested in learning more or need guidance on investing, you can reach out to the experts at sanriyafinvest.in through direct messaging or by visiting our website. We can provide personalized guidance to help you make the most of your investments.

 

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