When it comes to increasing the return on your investments there are few strategies or steps one should follow. Even though there are ways which helps to improve the return on investments, it also depends largely on investors ability to handle money and manage investment options.

Let’s understand the ways to improve your returns on investment:-

Be disciplined and consistent: Market is unpredictable and there can be sudden ups and downs. You can not control market, but you can surely control your emotions by disciplined and being consistent in your investments. More consistently you save and invest, the faster your investment portfolio will grow. The best example of this are PPF or a long term SIP in equity mutual funds.

Diversification: Diversification and right asset allocation helps a lot to reduce associated risk of the portfolio. An efficient mix of asset classes can dramatically reduce the overall portfolio risk which can also improve the expected returns.

Regular Review and Rebalancing: Regular review and rebalancing of investment portfolio is important step to stay on track and to improve returns too. With the time and changing market conditions, a portfolio will drift away from its original asset class percentages. Hence, it’s necessary to review it and put back in align with your financial goals. This step of adjusting the portfolio back to its original asset allocation is called rebalancing.

Rebalancing can be done by:

• Adding new investment in the asset class which is underweighted OR
• By selling a part of the over-weighted asset class and book the profit OR
• by investing the profit amount to the under-weighted asset class

Rebalancing can be done after taking into consideration your risk, goal and asset allocation.

Tax effective investing: Taxation have a great impact on your investment returns and on performance of your portfolio. While we can not completely avoid the tax but it’s possible to minimize the tax on returns. One can plan in advance for exiting the investments, decrease the unnecessary trading or money withdrawal and can invest for long term or till maturity.

Long term Investing: Having long term view in investments is an essential trait of right investor mindset. Make sure to invest for long term with a right goal in mind.

Take calculated risk: Risk and Returns, have inverse relationship. Taking too much risk without thinking, can result in a concentrated portfolio with chances of losses. On the other hand, not taking enough risk means to earn low returns. Hence, one needs to take calculated risk (can balance the risk & returns) which can provide safety and returns too.

Investment Fees: Pay attention to investment fees. Finding low cost investment options can help to improve the returns. Lowering your expenses just 1% can make a massive impact when compounded over time.

Additional tips:-

• Invest with a goal.
• Don’t make your investing decisions on the recommendations of others.
• Don’t chase returns. Stick to your investments if you have invested with a goal and after considering your duration of investment and risk.
• Take help of a good financial planner.