Few tips to Young Investors in this scenario...

Tips to get started!

• Set aside at least 20 per cent of your income towards investments as a thumb rule.
• Use the power of compounding -- the earlier you start the better.
• Have clarity on your risk/ return profile and don't overdo your equity exposure.
• Use SIPs into equity mutual funds for most part of your investments initially. 
• Enter direct equities in a phased manner. 
• Have some amount in debt funds as well.
• Choose your investments after good amount of research. Use this as an opportunity of learning on the practical aspects of finance.
• Learn from your mistakes. Patience and self discipline are key factors to being a successful investor.

To Invest or Not To Invest?
On the other hand one is tempted not to invest and spend in initial years. You need to invest for your future and also to reduce your taxes. A person in the 30 per cent tax bracket investing Rs 100 at an 8 per cent post tax return would get Rs 125 in three years.

On the other hand if you did not invest, your take-home would be lesser by Rs 30 and hence you can spend only Rs 70. You have lost out an opportunity to increase your money by Rs 55 over the base of Rs 70 you would have otherwise had to spend -- you have made a whole 80 per cent higher return in a short span of three years, even in a conservative investment avenue. 

If you take advantage of your full limit for the initial years of your career, there is a substantial asset creation that you are building for yourself. Investments made in the initial years provide the best compounding -- so the more you invest in your initial years, the better.

Spread your investment across short-medium-long term horizons to also take care of your financial needs. Short definitely doesn't mean 'a day' or 'a week', it is a period of three-five years if you are using equity. Equities take that long to reap you best returns in line with market cycles. 

To risk or not to risk?
What is an appropriate risk level that an investor should take? How much is too much? These are concerns that every investor has. For someone who had all his investment in equities, he would have now realised that the exposure was definitely too much. A crude thumb rule is to have equity exposure of 100 -- your age + equity exposure (eg your age is 25 years, then you could have an equity exposure of 75 per cent).

I hope these tips would be of some help to you for future investing decisions.