Investment Services

How To Choose The Investment Instrument?

Investing is a complicated process and requires years of experience to master it. There is no shortage of investment options in the market, and that is what makes choosing the right instrument confusing for investment purposes. Picking the wrong investment instrument may lead to monetary losses or not getting the desired returns. Therefore, we at Ashutosh Financial Services have created certain core parameters that help in choosing the right investment instrument which are:


The decision to pick the best investment instrument is directly related to your age. Young people generally do not have a lot of responsibilities and therefore can prefer investing in direct equity or mutual funds. Since young people have a long professional life ahead, they can prefer risky equity-related instruments for achieving their future goals.

On the other hand, people who are old should prefer fixed return instruments like bonds and fixed deposits. Since old people cannot work anymore it would be wise to invest in relatively safer instruments that give fixed returns.


The decision to pick the right investment option also depends on your goals. Goals can be short-term or long-term. For short-term goals, you should prefer a fixed deposit or a bond as it gives guaranteed and secure returns. For long-term goals, you should prefer high return-generating equity-oriented instruments like mutual funds and PMS.

One should further bifurcate goals as negotiable and non-negotiable goals. For example, children’s education goal is a non-negotiable goal and should be risk-free as much as possible. On the other hand, the goal of retirement is negotiable and can be achieved through investment in equities.


 Another factor that needs to be considered before picking a financial instrument for investing is your profile. Financial instruments for investment need to be carefully chosen depending on your income and responsibilities. A person with a higher salary and fewer responsibilities can prefer to invest in equities. However, a person even with a higher salary and lots of responsibilities should prefer safer and more stable instruments.

Thus, the number of responsibilities and your income influence the type of instrument you choose for investing.

When To Start Investing?

There is no right age to start investing however, it is important to invest. The sooner you start, the longer you invest, the more returns you make on your investments. Let’s take an example, a man starts investing Rs.1.2 Lakh a year from the age of 25 till the age of 58 and his elder brother starts investing Rs.1.2 Lakh a year from the age of 35 till the age of 58 in the same financial instrument. Assuming a 10% return on the investment, the younger brother’s maturity value would be Rs. 2.8 Crore (on an investment of 39.6 Lakhs) while the elder brother’s maturity value would be Rs. 1 Crore (on an investment of 27.6 Lakhs).

The huge difference is due to the power of compounding and early investment done by the younger brother. It is important to note that even though there is no right age to start investing, you should begin investing as soon as you can to generate the maximum possible wealth. The sooner you start the better the returns you get.

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