{"id":290,"date":"2020-02-21T08:03:03","date_gmt":"2020-02-21T08:03:03","guid":{"rendered":"https:\/\/www.invest19.com\/blog\/?p=290"},"modified":"2020-02-21T08:04:43","modified_gmt":"2020-02-21T08:04:43","slug":"is-risk-free-equity-investment-possible-or-not","status":"publish","type":"post","link":"https:\/\/www.invest19.com\/blog\/is-risk-free-equity-investment-possible-or-not\/","title":{"rendered":"Is Risk-Free Equity Investment Possible or Not?"},"content":{"rendered":"<div style=\"margin-top: 0px; margin-bottom: 0px;\" class=\"sharethis-inline-share-buttons\" ><\/div>\n<p>When we talk of investment, the inherent motive is always\nabout generating high returns whilst lowering the risks. Risk and return are\noften interlinked with each other and it\u2019s hardly an occurrence where we can\nimagine investment and returns without the cloud of risk hovering above it. <\/p>\n\n\n\n<p>When we talk of India and investment, there are different investment instruments around ranging from the conventional ones like fixed deposits, gold and more to modern-day equity and mutual funds. All of these come with varying degrees of returns and risk factors. The equity market for say already suffers from the myths of being a risky venture. But what if equity investment can be a risk-free endeavour? What if there is a possibility of investing in equity with zero risks? Let\u2019s find out the answer to this. <\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"counter-hierarchy counter-decimal ez-toc-grey\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\">Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\"><i class=\"ez-toc-glyphicon ez-toc-icon-toggle\"><\/i><\/a><\/span><\/div>\n<nav><ul class=\"ez-toc-list\"><li><a href=\"#Whats_RiskFree_Equity_Investment\" title=\"What\u2019s Risk\u2013Free Equity Investment?\">What\u2019s Risk\u2013Free Equity Investment?<\/a><\/li><li><a href=\"#Is_Risk-Free_Equity_Investment_a_Possibility\" title=\"Is Risk-Free Equity Investment a Possibility? \">Is Risk-Free Equity Investment a Possibility? <\/a><\/li><li><a href=\"#How_can_you_Reduce_Risk_in_Equity_Investment\" title=\"How can you Reduce Risk in Equity Investment? \">How can you Reduce Risk in Equity Investment? <\/a><ul><li><a href=\"#Never_ignore_the_fundamentals\" title=\"Never ignore the fundamentals: \">Never ignore the fundamentals: <\/a><\/li><li><a href=\"#Conduct_your_research\" title=\"Conduct your research: \">Conduct your research: <\/a><\/li><li><a href=\"#Invest_in_blue-chip_stocks\" title=\"Invest in blue-chip stocks: \">Invest in blue-chip stocks: <\/a><\/li><li><a href=\"#Diversify_your_investment\" title=\"Diversify your investment: \">Diversify your investment: <\/a><\/li><li><a href=\"#Invest_as_per_your_risk_appetite\" title=\"Invest as per your risk appetite: \">Invest as per your risk appetite: <\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n\n\n\n\n<h2 class=\"wp-block-heading\">What\u2019s Risk\u2013Free Equity Investment?<\/h2>\n\n\n\n<p>Going by the terminology, risk-free investment is something\nwhere you get the returns without the inherent risk of monetary loss. The same\ngoes for risk-free equity investment where it means getting returns from the\nequity without any fear of monetary loss. Equity is linked to market\nperformance and seeking a zero risk would be impractical to say. However, there\nare aspects and ways by which you can mitigate or reduce the risks in the equity\ninvestments to little to none. &nbsp;<\/p>\n\n\n\n<p>When you look at the Indian stock market, although it has\ngrown to enlarge since the last couple of decades, it still has only 2.5% of\nthe total population investing in it. That\u2019s quite low in comparison to other\nnations globally. But why does the Indian equity market suffer such a fate? The\nword \u2018Risk\u2019 has a great role in it. The general consensus is that the equity\nmarket is a risky endeavour and normal people can\u2019t afford to give into these\nrisks. The thoughts like equity market are reserved for only the rich ones also\nhave hampered it. <\/p>\n\n\n\n<p>But the truth is far different as equity is one of the high returns\ngenerating investment and is equally risk-free in comparison to other\ninvestment options. The stats back it predominately with returns of over 15%\nhistorically. <\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Is Risk-Free Equity Investment a Possibility? <\/h2>\n\n\n\n<p>The question is literally a borderline thing. If you look at\nthe practical approach, equity cannot entirely be deemed to be free of risk as\nit is linked with the market performance. But that doesn\u2019t mean that the theme\nof risk-free equity investment is a mythical thing. There are different\nstrategies and ways by which the risks can be reduced and that\u2019s as good as a risk-free\nequity investment. <\/p>\n\n\n\n<h2 class=\"wp-block-heading\">How can you Reduce Risk in Equity Investment? <\/h2>\n\n\n\n<p>Here\u2019s how you can reduce risks on your equity investments: <\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Never ignore the fundamentals:<\/strong> <\/h3>\n\n\n\n<p>Often times when we look to invest in the equity, we go for things like the market trend, sentiments and more. And in that, we often neglect the core basics. The core basic before investing in stock is to know the fundamentals of the company and perform the <strong><a rel=\"noreferrer noopener\" aria-label=\"fundamental analysis of stock (opens in a new tab)\" href=\"https:\/\/www.invest19.com\/blog\/what-is-the-fundamental-analysis-of-stocks\/\" target=\"_blank\">fundamental analysis of stock<\/a><\/strong> before moving forward. Fundamental research will allow you to know the company properly and find out whether your investment will yield risk-free returns or not. A company with strong fundamentals will never die down and will always stay around in the market. <\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Conduct your research:<\/strong> <\/h3>\n\n\n\n<p>One of the major things about stock market investment is people lack the knowledge and end up following suit of the market sentiments. Never discount the value of knowledge. Look through the market, research the things, and know about the terms and how the market functions. That way you\u2019ll find out shares that are worth investing whilst having pretty minimal risks. \u00a0<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Invest in blue-chip stocks:<\/strong> <\/h3>\n\n\n\n<p>Blue-chip stocks are one of the best investment options when you think of stability and risk-free nature. <strong><a rel=\"noreferrer noopener\" aria-label=\"Blue-chip stocks (opens in a new tab)\" href=\"https:\/\/www.invest19.com\/blog\/how-safe-is-it-to-invest-in-blue-chip-stocks\/\" target=\"_blank\">Blue-chip stocks<\/a><\/strong> refer to the large-cap shares of well-organized companies that tend to have a history of sound financial position. These provide dependable earnings to shareholders and are kind of assured in comparison to other investment options. <\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Diversify your investment:<\/strong> <\/h3>\n\n\n\n<p>Diversification is one of the most important strategies that allow you to reduce the risk is investment substantially. The aspect of diversification looks at the investing into different options whereby even if one of the instruments doesn\u2019t perform well, the returns from the others will offset it and your portfolio value will not be in the decline.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Invest as per your risk appetite: <\/strong><\/h3>\n\n\n\n<p>The risk factor will always remain in the equity market despite the measures we take. So it\u2019s always wise to map your risk tolerance level before investing. That way even if the market turns upside down anytime later you won\u2019t have to bear the grunt. Plan your investments accordingly and you\u2019ll be set for good. The phrase \u2018hope for the best, prepare for the worst\u2019 fits the bill completely here. <\/p>\n\n\n\n<p>Risk-free equity investment is an intriguing term and is\nsomething that is practically on the borderline. The risk will always remain\nbut that doesn\u2019t mean that you cannot mitigate them. Risk-free equity\ninvestment is a possibility if you look at the aspect of mitigating and\nreducing the risks. <\/p>\n<div class='epvc-post-count'><span class='epvc-eye'><\/span>  <span class=\"epvc-count\"> 3,756<\/span><\/div><div class=\"pld-like-dislike-wrap pld-template-1\">\n    <div class=\"pld-like-wrap  pld-common-wrap\">\n    <a href=\"javascript:void(0);\" class=\"pld-like-trigger pld-like-dislike-trigger \" title=\"\" data-post-id=\"290\" data-trigger-type=\"like\" data-restriction=\"ip\" data-ip-check=\"0\" data-user-check=\"1\">\n                        <i class=\"fas fa-thumbs-up\"><\/i>\n                    <\/a>\n    <span class=\"pld-like-count-wrap pld-count-wrap\">4    <\/span>\n<\/div><\/div>\n\n","protected":false},"excerpt":{"rendered":"<p>When we talk of investment, the inherent motive is always about generating high returns whilst lowering the risks. Risk and return are often interlinked with [&hellip;] <span class=\"read-more-link\"><a class=\"read-more\" href=\"https:\/\/www.invest19.com\/blog\/is-risk-free-equity-investment-possible-or-not\/\">Read More<\/a><\/span><\/p>\n","protected":false},"author":1,"featured_media":291,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[18],"class_list":["post-290","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-investment","tag-equity-investment"],"_links":{"self":[{"href":"https:\/\/www.invest19.com\/blog\/wp-json\/wp\/v2\/posts\/290","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.invest19.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.invest19.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.invest19.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.invest19.com\/blog\/wp-json\/wp\/v2\/comments?post=290"}],"version-history":[{"count":2,"href":"https:\/\/www.invest19.com\/blog\/wp-json\/wp\/v2\/posts\/290\/revisions"}],"predecessor-version":[{"id":293,"href":"https:\/\/www.invest19.com\/blog\/wp-json\/wp\/v2\/posts\/290\/revisions\/293"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.invest19.com\/blog\/wp-json\/wp\/v2\/media\/291"}],"wp:attachment":[{"href":"https:\/\/www.invest19.com\/blog\/wp-json\/wp\/v2\/media?parent=290"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.invest19.com\/blog\/wp-json\/wp\/v2\/categories?post=290"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.invest19.com\/blog\/wp-json\/wp\/v2\/tags?post=290"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}