{"id":9956,"date":"2022-08-25T11:12:32","date_gmt":"2022-08-25T05:42:32","guid":{"rendered":"https:\/\/www.tickertape.in\/blog\/?p=9956"},"modified":"2022-08-29T16:20:42","modified_gmt":"2022-08-29T10:50:42","slug":"key-investment-concepts-beginners-should-know","status":"publish","type":"post","link":"https:\/\/www.tickertape.in\/blog\/key-investment-concepts-beginners-should-know\/","title":{"rendered":"14 Key Investment Concepts Beginners Should Know"},"content":{"rendered":"\n<p>Investing is a way to build wealth. But it\u2019s not as easy as it seems to be. There are several concepts an investor needs to be aware of to make the best of their investment. For a beginner, it can be a big decision. Getting started with investing can be overwhelming. And it can take some time to learn and understand investment concepts. This article teaches about investment concepts a beginner should be familiar with.&nbsp;<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_66_1 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title \" >Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.tickertape.in\/blog\/key-investment-concepts-beginners-should-know\/#14-key-investment-concepts-for-beginners\" title=\"14 key investment concepts for beginners\">14 key investment concepts for beginners<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.tickertape.in\/blog\/key-investment-concepts-beginners-should-know\/#1-Financial-plan\" title=\"1. Financial plan\">1. Financial plan<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.tickertape.in\/blog\/key-investment-concepts-beginners-should-know\/#2-Monthly-cash-flow\" title=\"2. Monthly cash flow&nbsp;\">2. Monthly cash flow&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.tickertape.in\/blog\/key-investment-concepts-beginners-should-know\/#3-Risk-and-returns\" title=\"3. Risk and returns&nbsp;\">3. Risk and returns&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.tickertape.in\/blog\/key-investment-concepts-beginners-should-know\/#4-Returns\" title=\"4. Returns\">4. Returns<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/www.tickertape.in\/blog\/key-investment-concepts-beginners-should-know\/#5-Compounding\" title=\"5. Compounding\">5. Compounding<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/www.tickertape.in\/blog\/key-investment-concepts-beginners-should-know\/#6-Investment-strategy\" title=\"6. Investment strategy&nbsp;\">6. Investment strategy&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/www.tickertape.in\/blog\/key-investment-concepts-beginners-should-know\/#7-Market-capitalisation\" title=\"7. Market capitalisation&nbsp;\">7. Market capitalisation&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/www.tickertape.in\/blog\/key-investment-concepts-beginners-should-know\/#8-Volatility\" title=\"8. Volatility&nbsp;\">8. Volatility&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/www.tickertape.in\/blog\/key-investment-concepts-beginners-should-know\/#9-Investment-diversification\" title=\"9. Investment diversification&nbsp;\">9. Investment diversification&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/www.tickertape.in\/blog\/key-investment-concepts-beginners-should-know\/#10-Asset-allocation\" title=\"10. Asset allocation&nbsp;\">10. Asset allocation&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/www.tickertape.in\/blog\/key-investment-concepts-beginners-should-know\/#11-Buy-and-hold-investing\" title=\"11. Buy and hold investing&nbsp;\">11. Buy and hold investing&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/www.tickertape.in\/blog\/key-investment-concepts-beginners-should-know\/#12-Investment-costs\" title=\"12. Investment costs&nbsp;\">12. Investment costs&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/www.tickertape.in\/blog\/key-investment-concepts-beginners-should-know\/#13-Uncertainty\" title=\"13. Uncertainty\">13. Uncertainty<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-15\" href=\"https:\/\/www.tickertape.in\/blog\/key-investment-concepts-beginners-should-know\/#14-Rebalancing\" title=\"14. Rebalancing&nbsp;\">14. Rebalancing&nbsp;<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-16\" href=\"https:\/\/www.tickertape.in\/blog\/key-investment-concepts-beginners-should-know\/#Conclusion\" title=\"Conclusion&nbsp;\">Conclusion&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-17\" href=\"https:\/\/www.tickertape.in\/blog\/key-investment-concepts-beginners-should-know\/#FAQs\" title=\"FAQs\">FAQs<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-18\" href=\"https:\/\/www.tickertape.in\/blog\/key-investment-concepts-beginners-should-know\/#1-How-to-find-the-best-stocks-in-India\" title=\"1. How to find the best stocks in India?\u00a0\">1. How to find the best stocks in India?\u00a0<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-19\" href=\"https:\/\/www.tickertape.in\/blog\/key-investment-concepts-beginners-should-know\/#2-How-to-find-the-best-mutual-funds-in-India\" title=\"2. How to find the best mutual funds in India?\u00a0\">2. How to find the best mutual funds in India?\u00a0<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-20\" href=\"https:\/\/www.tickertape.in\/blog\/key-investment-concepts-beginners-should-know\/#3-How-to-invest-in-stocks-through-Tickertape\" title=\"3. How to invest in stocks through Tickertape?\u00a0\">3. How to invest in stocks through Tickertape?\u00a0<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-21\" href=\"https:\/\/www.tickertape.in\/blog\/key-investment-concepts-beginners-should-know\/#4-Is-it-better-to-save-or-invest\" title=\"4. Is it better to save or invest?\u00a0\">4. Is it better to save or invest?\u00a0<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-22\" href=\"https:\/\/www.tickertape.in\/blog\/key-investment-concepts-beginners-should-know\/#5-For-how-long-can-we-hold-our-investment-in-stocks\" title=\"5. For how long can we hold our investment in stocks?\">5. For how long can we hold our investment in stocks?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-23\" href=\"https:\/\/www.tickertape.in\/blog\/key-investment-concepts-beginners-should-know\/#6-Is-it-a-good-idea-to-invest-in-stocks-for-retirement\" title=\"6. Is it a good idea to invest in stocks for retirement?\">6. Is it a good idea to invest in stocks for retirement?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-24\" href=\"https:\/\/www.tickertape.in\/blog\/key-investment-concepts-beginners-should-know\/#7-Is-it-mandatory-to-have-an-emergency-fund\" title=\"7. Is it mandatory to have an emergency fund?\">7. Is it mandatory to have an emergency fund?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-25\" href=\"https:\/\/www.tickertape.in\/blog\/key-investment-concepts-beginners-should-know\/#8-Where-can-we-save-our-emergency-fund\" title=\"8. Where can we save our emergency fund?\u00a0\">8. Where can we save our emergency fund?\u00a0<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-26\" href=\"https:\/\/www.tickertape.in\/blog\/key-investment-concepts-beginners-should-know\/#9-How-much-should-I-save-in-the-emergency-fund\" title=\"9. How much should I save in the emergency fund?\u00a0\u00a0\u00a0\">9. How much should I save in the emergency fund?\u00a0\u00a0\u00a0<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"14-key-investment-concepts-for-beginners\"><\/span><strong>14 key investment concepts for beginners<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Here are 14 key investment concepts you should know as a beginner. These are not just basic concepts but also essential ones which lays the foundation for your investment journey.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"1-Financial-plan\"><\/span>1. <strong>Financial plan<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Having a well-crafted financial plan is the first and foremost step of the investment journey. These financial plans include buying a house, funding your child\u2019s education, retirement savings, etc. These plans vary over time.&nbsp;<\/p>\n\n\n\n<p>A financial goal will help you understand your investment requirements and choose the right investment accordingly. As there are different investment options like stocks, <a href=\"https:\/\/www.tickertape.in\/blog\/mutual-funds\/\">mutual funds<\/a>, real estate, etc., you can pick the correct one according to your goal. If your financial goal is to buy a house in the next 10 yrs, you can pick a long-term investment option. With the fixed goal in mind, you can be devoted to it and keep an eye on the milestones to achieve the goal.&nbsp;<\/p>\n\n\n\n<p>Setting your financial goals in the early stages of working days is advisable. You can seek a financial expert and plan on how to achieve the goals with your income.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"2-Monthly-cash-flow\"><\/span>2. <strong>Monthly cash flow&nbsp;<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>While setting a financial goal, as an investor, it is vital to know your monthly income, irrespective of your profession. You can be a full-time investor or part-time investor. In any case, you should have a precise idea of your monthly income and expenses. This will help you in planning your investments, savings and expenses effectively.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"3-Risk-and-returns\"><\/span>3. <strong>Risk and returns&nbsp;<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Risk is an important parameter of an investment. Every investment comes with a certain amount of risk. Before picking an investment, investors must analyse their risk appetite, assuming the worst-case scenario and how much loss they can tolerate.&nbsp;<\/p>\n\n\n\n<p>This investment concept can be a bit scary for a beginner, but it is vital to know that it is part of the investment. There are low-risk investments available, but the returns may not be as high as other moderate-high risk investments. Therefore while understanding your investment goal, analyse your risk appetite as well.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"4-Returns\"><\/span>4. <strong>Returns<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>In an investment, risks and returns are tied together. Several investment options are associated with high risk and provide huge profits. If market conditions are not favourable, these high-risk investments can also fall and create a loss. But in the case of low-risk investment, the returns may not be as high as expected.&nbsp;&nbsp;<\/p>\n\n\n\n<p>For a young investor, huge profit investments can be enticing. But it comes with a risk. However, for a beginner, it is essential to understand the working of an investment and the market before diving deep irrespective of the risk factor. You can follow the \u2018slow and steady wins the race\u2019 approach with your hard-earned money.&nbsp;&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"5-Compounding\"><\/span>5. <strong>Compounding<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Investments work with the magic of compounding. In compounding, your investment multiplies exponentially. In simple terms, in compounding, you will receive returns on your returns. Here\u2019s an example to understand the power of compounding better.&nbsp;<\/p>\n\n\n\n<p>Let\u2019s assume that your initial investment annual amount is Rs. 20,000. If the <a href=\"https:\/\/www.tickertape.in\/blog\/flat-interest-rate-vs-reducing-balance-interest-rate\/\">interest rate<\/a> is 10% per annum and compounded monthly, your money will grow as follows:&nbsp;<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td><strong>Month<\/strong><\/td><td><strong>Principal (in Rs.)<\/strong><\/td><td><strong>Return rate<\/strong><\/td><td><strong>Amount returned (in Rs.)<\/strong><\/td><\/tr><tr><td>January<\/td><td>20,000<\/td><td>10%<\/td><td>22,000<\/td><\/tr><tr><td>February<\/td><td>22,000<\/td><td>10%<\/td><td>24,200<\/td><\/tr><tr><td>March<\/td><td>24,200<\/td><td>10%<\/td><td>26,620<\/td><\/tr><tr><td>April<\/td><td>26,620<\/td><td>10%<\/td><td>29,282<\/td><\/tr><tr><td>May<\/td><td>29,282<\/td><td>10%<\/td><td>32,210<\/td><\/tr><tr><td>June<\/td><td>32,210<\/td><td>10%<\/td><td>35,431<\/td><\/tr><tr><td>July<\/td><td>35,431<\/td><td>10%<\/td><td>38,974<\/td><\/tr><tr><td>august<\/td><td>38,974<\/td><td>10%<\/td><td>42,871<\/td><\/tr><tr><td>September<\/td><td>42,871<\/td><td>10%<\/td><td>47,158<\/td><\/tr><tr><td>October<\/td><td>47,158<\/td><td>10%<\/td><td>51,873<\/td><\/tr><tr><td>November<\/td><td>51,873<\/td><td>10%<\/td><td>57,060<\/td><\/tr><tr><td>December<\/td><td>57,060<\/td><td>10%<\/td><td>62,766<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p>After a year, the return on your investment of Rs. 20,000 will be Rs. 62,766. It is evident how compounding works. The money keeps multiplying itself, and the returns are huge in the long term.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"6-Investment-strategy\"><\/span>6. <strong>Investment strategy&nbsp;<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>As mentioned earlier, your investment strategy depends upon your financial goal. If your goal is to accumulate a good corpus of wealth for a later time, you can choose a gain-oriented strategy. If you are looking to generate income, then there are income-based investment strategies.&nbsp;&nbsp;<\/p>\n\n\n\n<p>Also, you must be aware of strategies like an active and passive investments. As the name\u00a0suggests, active investment means an investor must be active in buying and selling stocks. They act according to the market fluctuations. In contrast, a passive investing strategy is where the investor is not trading actively.\u00a0<\/p>\n\n\n\n<p>Irrespective of your investment stage (beginner or experienced), you need to be well aware of the investment strategies and their applicability to everyone.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"7-Market-capitalisation\"><\/span>7. <strong>Market capitalisation&nbsp;<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>This is for the investors looking to <a href=\"https:\/\/www.tickertape.in\/blog\/why-should-you-prioritise-investing\/\">invest<\/a> in stocks. <a href=\"https:\/\/www.tickertape.in\/blog\/market-capitalisation-the-difference-between-small-cap-mid-cap-and-large-cap\/\" data-type=\"post\" data-id=\"9674\">Market capitalisation<\/a> is nothing but the <a href=\"https:\/\/www.tickertape.in\/blog\/market-value\/\">market value<\/a> of a company. Public companies are categorised according to their market value. It helps an investor understand a company\u2019s value and growth potential.&nbsp;<\/p>\n\n\n\n<p>Companies with a market value of less than Rs. 5,000 cr. are small-cap companies, more than Rs. 5,000 cr. and less than Rs. 20,000 cr. are mid-cap companies, and more than Rs. 20,000 cr. are large-cap companies. In the stock exchange, these companies are ranked according to their <a href=\"https:\/\/www.tickertape.in\/blog\/market-capitalization\/\">market capitalisation<\/a>.&nbsp;<\/p>\n\n\n\n<p>You can calculate a company\u2019s market capitalisation by multiplying the company\u2019s current share price with the number of outstanding shares.&nbsp;<\/p>\n\n\n\n<p>Alternatively, you can use <a href=\"https:\/\/www.tickertape.in\/screener\/equity?utm_source=blog&amp;utm_medium=article\" target=\"_blank\" rel=\"noreferrer noopener\">Tickertape Stock Screener<\/a> to filter the stocks according to the market capitalisation and other parameters.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"8-Volatility\"><\/span>8. <strong>Volatility&nbsp;<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>It refers to how much a stock\u2019s price fluctuates. High-risk stocks tend to have bigger fluctuations, while low-risk or safe stocks are stable.&nbsp;<\/p>\n\n\n\n<p>In publicly traded stocks, you can check for <a href=\"https:\/\/www.tickertape.in\/blog\/beta-in-stock-market\/\">beta<\/a>, a common measure of <a href=\"https:\/\/www.tickertape.in\/blog\/volatility\/\">volatility<\/a>. If the beta value is greater than 1, the stock is more volatile than the market. If the beta value is less than 1, it is less volatile than the market.&nbsp;<\/p>\n\n\n\n<p>Though the beta value doesn\u2019t give a complete picture of the stocks\u2019 risk, it is one factor determining a stock\u2019s risk.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"9-Investment-diversification\"><\/span>9. <strong>Investment diversification&nbsp;<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Once, a wise man said, \u201cDon\u2019t put all your eggs in one basket\u201d. This applies to investments as well. You can diversify your investments in various options like stocks, real estate, bonds, etc.&nbsp;<\/p>\n\n\n\n<p>For example, if you plan to <a href=\"https:\/\/www.tickertape.in\/blog\/how-to-invest-in-the-stock-market-beginners-guide\/\">invest in stocks<\/a>, you can diversify between small-cap, mid-cap and large-cap companies. Not all companies perform the same way under different market conditions. When one stock falls, the other may rise and compensate you for the loss. It is a risk-management technique.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"10-Asset-allocation\"><\/span>10. <strong>Asset allocation&nbsp;<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>This aims to balance the risk and reward of the investment by considering the investor\u2019s age, goals, and risk tolerance. There are four main asset classes &#8211; <a href=\"https:\/\/www.tickertape.in\/blog\/fixed-income-securities\/\" data-type=\"post\" data-id=\"4230\">fixed-income<\/a>, <a href=\"https:\/\/www.tickertape.in\/blog\/what-is-equity\/\" data-type=\"post\" data-id=\"5755\">equity<\/a>, cash and real estate. The percentage of investment into these assets is termed <a href=\"https:\/\/www.tickertape.in\/blog\/why-is-asset-allocation-one-of-the-most-important-aspects-of-portfolio-construction\/\">asset allocation<\/a>.&nbsp;<\/p>\n\n\n\n<p><a href=\"https:\/\/www.tickertape.in\/blog\/mitigating-portfolio-risk-through-diversification\/\">Diversification<\/a> and <a href=\"https:\/\/www.tickertape.in\/blog\/what-is-asset-allocation\/\" data-type=\"post\" data-id=\"4988\">asset allocation<\/a> are connected. Diversification is a way of asset allocation. Asset allocation helps in determining the best strategy for investment in marketable securities. Whereas diversification is when the investor wants to expand the investment by investing a small percentage in different assets.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"11-Buy-and-hold-investing\"><\/span>11. <strong>Buy and hold investing&nbsp;<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>As the name suggests, buy and hold investing is an approach where the investor buys a stock intending to hold them for a long time. This approach will help in taking advantage of the long-term <a href=\"https:\/\/www.tickertape.in\/blog\/how-to-invest-in-shares\/\">stock market<\/a> growth.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"12-Investment-costs\"><\/span>12. <strong>Investment costs&nbsp;<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Any investment has several hidden fees on them. For a beginner, it is ideal to start reading the terms and conditions properly. This will help you avoid all the unnecessary costs which can cost you big later.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"13-Uncertainty\"><\/span>13. <strong>Uncertainty<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>There is no guarantee that a particular investment will perform well all the time. It may be good or bad now, but the growth predictability is uncertain after a year. Be mentally prepared even if your investment fails. Have an <a href=\"https:\/\/www.tickertape.in\/blog\/using-and-rebuilding-an-contingency-fund\/\">emergency fund<\/a> set to help you during uncertain times.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"14-Rebalancing\"><\/span><strong>14. Rebalancing<\/strong>&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>The process of investments doesn\u2019t work like invest and forget. You must restore your portfolio once in a while to meet the target allocation. In simple terms, after a period of investment, you\u2019ll dilute the underperforming assets and invest in the ones that show potential growth. Here the idea is to set risk control and to ensure that the portfolio is not dependent entirely on a single asset class for profit or loss.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span><strong>Conclusion&nbsp;<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Investing can be simple once you get hold of it. Understanding the fundamental concepts will lay a strong foundation. Apart from the concepts mentioned above, there are several other attributes that you need to know before picking an asset class. Before investing in any asset, you must have a good idea about the investment. For example, many people assume that investing in stocks is easy and provides high returns, but the stock market may not always be fruitful. It depends on several global factors. Overall, keep it simple and play safe till you understand better. You can take the help of a financial expert who can guide you with your investment.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"FAQs\"><\/span><strong>FAQs<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n<div id=\"rank-math-faq\" class=\"rank-math-block\">\n<div class=\"rank-math-list \">\n<div id=\"faq-question-1661400356348\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \"><span class=\"ez-toc-section\" id=\"1-How-to-find-the-best-stocks-in-India\"><\/span>1. <strong>How to find the best stocks in India?\u00a0<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<div class=\"rank-math-answer \">\n\n<p>You can use <a href=\"https:\/\/www.tickertape.in\/screener\/equity?utm_source=blog&amp;utm_medium=article\" target=\"_blank\" rel=\"noreferrer noopener\">Tickertape Stock Screener<\/a> to find the best stocks in India. You can filter stocks according to different parameters like sector, market cap, price, returns, etc.\u00a0<\/p>\n\n<\/div>\n<\/div>\n<div id=\"faq-question-1661400359944\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \"><span class=\"ez-toc-section\" id=\"2-How-to-find-the-best-mutual-funds-in-India\"><\/span>2. <strong>How to find the best mutual funds in India?\u00a0<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<div class=\"rank-math-answer \">\n\n<p>You can use <a href=\"https:\/\/www.tickertape.in\/screener\/mutual-fund?utm_source=blog&amp;utm_medium=article\" target=\"_blank\" rel=\"noreferrer noopener\">Tickertape Mutual Fund Screener<\/a> to find the best <a href=\"https:\/\/www.tickertape.in\/blog\/advantages-disadvantages-of-mutual-funds\/\">mutual funds in India<\/a>. You can filter funds according to parameters like category, risk, returns and many more.\u00a0<\/p>\n\n<\/div>\n<\/div>\n<div id=\"faq-question-1661400371507\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \"><span class=\"ez-toc-section\" id=\"3-How-to-invest-in-stocks-through-Tickertape\"><\/span>3. <strong>How to invest in stocks through Tickertape?\u00a0<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<div class=\"rank-math-answer \">\n\n<p>The steps to invest in stocks are simple which is as follows:\u00a0<br \/>&#8211; First, open a Demat or <a href=\"https:\/\/www.tickertape.in\/blog\/what-is-a-trading-account\/\">trading account<\/a><br \/>&#8211; Log in to <a href=\"https:\/\/www.tickertape.in?utm_source=blog&amp;utm_medium=article\" target=\"_blank\" rel=\"noreferrer noopener\">Tickertape<\/a>\u00a0<br \/>&#8211; Visit Tickertape <a href=\"https:\/\/www.tickertape.in\/blog\/tickertape-stock-screener-to-discover-largecap-stocks\/\">Stock Screener<\/a> and filter the stocks according to your requirements<br \/>&#8211; Pick the best stocks<br \/>&#8211; Click on \u2018Buy\u2019 and complete the purchase<\/p>\n\n<\/div>\n<\/div>\n<div id=\"faq-question-1661400374389\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \"><span class=\"ez-toc-section\" id=\"4-Is-it-better-to-save-or-invest\"><\/span>4. <strong>Is it better to save or invest?\u00a0<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<div class=\"rank-math-answer \">\n\n<p>It depends on the individual. Savings are associated with no risk, but there is no growth. Whereas in investments, there is a chance to double your money, but it involves a certain level of risk.\u00a0<\/p>\n\n<\/div>\n<\/div>\n<div id=\"faq-question-1661400386690\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \"><span class=\"ez-toc-section\" id=\"5-For-how-long-can-we-hold-our-investment-in-stocks\"><\/span>5. <strong>For how long can we hold our investment in stocks?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<div class=\"rank-math-answer \">\n\n<p>Stocks are for long-term investments. There is no ideal investment period for stocks. It depends on your investment goal.\u00a0<\/p>\n\n<\/div>\n<\/div>\n<div id=\"faq-question-1661400389406\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \"><span class=\"ez-toc-section\" id=\"6-Is-it-a-good-idea-to-invest-in-stocks-for-retirement\"><\/span>6. <strong>Is it a good idea to invest in stocks for retirement?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<div class=\"rank-math-answer \">\n\n<p>Though stocks are a good investment choice for retirement, it depends on the investor\u2019s age. If you are close to retirement, investing in low-risk investment options like government bonds or fixed deposits is better, as stocks carry high risk.\u00a0<\/p>\n\n<\/div>\n<\/div>\n<div id=\"faq-question-1661400395939\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \"><span class=\"ez-toc-section\" id=\"7-Is-it-mandatory-to-have-an-emergency-fund\"><\/span>7. <strong>Is it mandatory to have an emergency fund?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<div class=\"rank-math-answer \">\n\n<p>Yes. Emergency funds provide financial safety during uncertain times like job loss, medical expenses, etc.\u00a0<\/p>\n\n<\/div>\n<\/div>\n<div id=\"faq-question-1661400402525\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \"><span class=\"ez-toc-section\" id=\"8-Where-can-we-save-our-emergency-fund\"><\/span>8. <strong>Where can we save our emergency fund?\u00a0<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<div class=\"rank-math-answer \">\n\n<p>Your emergency fund can be saved in your bank account. Just ensure that you can avail the funds easily at the time of need.\u00a0<\/p>\n\n<\/div>\n<\/div>\n<div id=\"faq-question-1661400425291\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \"><span class=\"ez-toc-section\" id=\"9-How-much-should-I-save-in-the-emergency-fund\"><\/span>9. <strong>How much should I save in the emergency fund?\u00a0\u00a0<\/strong>\u00a0<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<div class=\"rank-math-answer \">\n\n<p>Your emergency funds should have at least 3-6 months of your monthly income. It will help you in the case of emergencies like medical expenses, house repairs, job loss, etc.<\/p>\n\n<\/div>\n<\/div>\n<\/div>\n<\/div>","protected":false},"excerpt":{"rendered":"<p>Getting started with investing can be overwhelming. And it can take some time to learn and understand investment concepts. This article teaches about investment concepts a beginner should be familiar with.\u00a0<\/p>\n","protected":false},"author":90,"featured_media":9957,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"_lmt_disableupdate":"no","_lmt_disable":"no","footnotes":""},"categories":[1722],"tags":[],"acf":[],"modified_by":null,"jetpack_featured_media_url":"https:\/\/www.tickertape.in\/blog\/wp-content\/uploads\/2022\/08\/TT-24-Aug-Investing-Concepts-BB-01-scaled.jpg?wsr","_links":{"self":[{"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/posts\/9956"}],"collection":[{"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/users\/90"}],"replies":[{"embeddable":true,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/comments?post=9956"}],"version-history":[{"count":4,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/posts\/9956\/revisions"}],"predecessor-version":[{"id":10017,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/posts\/9956\/revisions\/10017"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/media\/9957"}],"wp:attachment":[{"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/media?parent=9956"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/categories?post=9956"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/tags?post=9956"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}