5 Investment Lessons, You Should Learn and Implement In 2021

As the volatile year of 2020 shocked us with its uncertainties and the surprising downs and ups that shook the economy and investors alike, it also taught us valuable lessons to be learned and implemented in 2021. These lessons hold even more significance to teach you how to surf out the unforeseen circumstances and exercise financial stability no matter how uncertain the times are.

●  Diversification is the best approach.

One of the basic lessons in investing is diversification. It is one of the most important things for an investor to disperse risk. Putting all eggs in one basket isn’t a good thing, and this is true for investment too. To increase your exposure to more opportunities for returns, investing in a diverse range of stocks spreads the risk of loss if a bad event hits one of the stocks. In unprecedented times, diversification reduces volatility and significantly reduces losses.

●  Play the long game.

Reacting to every volatile development in the market is not the way to go. Keeping calm is a cornerstone of investing, and the pandemic only cemented the statement even more. Past months saw many investors losing significantly as a result of sudden sell-offs because of the pandemic crisis.

Fixed deposit is one way to ensure you ride out the short-lived volatilities and make yourself financially confident and stable. Choosing a bank with a high interest fixed deposit can be an excellent way to manoeuvre through turbulent times and move forward carefree and confident in 2021.

Keeping cash in case of emergency .

Keeping cash is also one of the more important things for an investor to mitigate through unpredictable times. Taking lessons from a very common practice Indian mothers have been adopting for ages, i.e., keeping cash hidden in the kitchen containers, keeping emergency funds for times just like 2020 can be a great and an effective way to save yourself from impulsive investment selling.

●   Staying calm, doing nothing is also a great strategy.

If 2020 has taught any lesson in investing, it’d be that of keeping calm amidst unstable and dire times. Giving in to rash and hasty decisions in response to temporary changes has made investors suffer huge losses. In times like these, it’s more important than ever, to have a cool and collected mind and adapt in accordance with the market condition.

The unprecedented times present you with various new avenues to exploit and make the most out of unexpected opportunities when others can lose sight of the longer game.

●  Expanding your options.

Widening not just your stock options for investment but also the ones outside the direct market such as a fixed deposit. It’s a historically proven and traditional method to beat inflation and temporary ups and downs in the economy. Paying attention to asset allocation during this volatile period can steer you clear of the risks. Investing in a fixed deposit offers a yield that is independent of the market.

Why is fixed deposit the best form of investment?

When investing, it is crucial to evaluate all available options and remember that no one option will meet all your investment goals. However, the right option will maximize your wealth in a time-effective manner. The best way to start is to set up a fixed deposit.

Most market investments are erratic and rely upon the economic scenario. Unlike investing in the stock market, fixed deposits are safe investments without market risks and guaranteed returns. Fixed deposits are secure and independent of the fluctuating value of the market.

You can also use your fixed deposit to obtain a loan when you need funds. You can sanction up to 70% of the fixed deposit amount at an inexpensive interest. And in case of an emergency, you can liquidate your fixed deposit funds before maturity.

PNB housing finance Ltd is the 2nd largest deposit-taking HFC in India in terms of deposit book size. With its highest fd interest rates of up to 6.95% and rated AA+/Negative with a negative outlook by CRISIL, you would not find an opportunity better than this to invest. FDs provided by PNB housing can be created for the time of 12 months to 120 months with a loan facility of up to 75% of the deposit.