A. CAGR (Compound Annual Growth Rate)
CAGR is the rate at which your investment grows annually over time. It's a good metric to evaluate the performance of an index like Nifty or your mutual fund over the long term.
B. SIP (Systematic Investment Plan)
SIP is a method of investing a fixed sum of money regularly (monthly or quarterly) in mutual funds. This strategy works well for people who want to invest for long-term wealth creation without worrying about market timing.
C. Risk Tolerance and Asset Allocation
Before investing, evaluate your risk tolerance. If you're younger and have a long investment horizon, you can afford to take higher risks in equities.
As you age or approach specific financial goals (like retirement), gradually shift to more stable, conservative investments such as bonds or debt funds.
D. Tax Considerations
Long-term capital gains (LTCG) from equity investments are taxed at 12.5% if the gain exceeds ₹1.25 lakh in a year.
Short-term capital gains (STCG) from equity investments are taxed at 20% if held for less than a year.
Tax-saving options like ELSS (Equity-Linked Savings Schemes) can provide tax deductions under Section 80C.