When we talk about investment mediums, it is essential to remember that today, various avenues are open for parking one's money. Whether your investment goal is long-term or short-term, you can diversify your portfolio to gain substantial wealth if you strategize well.
The stock market is a volatile space. Like normal investor behavior, many pull out their money from 'unstable investments' when the markets dip low. However, not all unconventional investment mediums are unsafe or unstable. Some can turn out to be gold mines during a period as such.
In this blog, we will read about the 10 investment mediums you can bank on.
Top 10 Investments - 2023
Investment Via Leasing What Is It: Investing via Lease is an upcoming investment option in Indiaand it basically means investing in an asset which can further make money for you. Some companies facilitate online, hassle-free leasing, and this, in turn, makes the experience hassle-free. Returns: You can earn substantial returns via leasing, which is 15%+ IRR if you invest through the right platform. Risk Factor: It can be categorized as low-moderate risk. However, it is definitely less than the stock market, as market forces do not guide it.
Equity Market What Is It: It is a platform where people invest in listed companies. You can either do so directly through the stock market (NSE, BSE, etc.), or through equity mutual funds, in which case, a pool of money contributed by investors is portioned in different stocks via the fund manager. Returns: You can garner high returns when the market is in its bull phase and, similarly, face a major loss when it is lunging on the bear. Risk Factor: This platform is highly risky simply because it is controlled by market forces, which are unpredictable and volatile.
Debt Mutual Funds What Is It: These are mutual funds which have relatively less risk because they invest in government entities and are not influenced by market forces. Returns: They are less volatile and can give you a maximum return of up to 9-11% in 3 years. Risk Factor: They can be categorized as low-medium risk.
Real Estate What Is It: Real estate deals with investing in land and property. This, again, is a more stable source of income as the value of land appreciates vastly and, thus, keeps pace with inflation. Returns: Returns are appreciated as the value of fixed assets like land increases unless it is subjected to unavoidable circumstances like war or natural disasters. Risk Factor: While they are not as great as the stock market, one can face liquidity, market and interest rate risks.
Fixed Deposit What Is It: An FD is a popular investment medium in India. More than 50% of investors in the country prefer an FD over other unconventional means. It provides a fixed rate of interest and is suitable for retired individuals or even people who want a stable alternative income. Returns: In 2020, the fixed deposit rate is approximately 6-7%. Risk Factor: It is a low-risk investment avenue.
Gold What Is It: A unique thing about investing in gold is that when the market is low, the demand for this asset increases simply because the units are priced lower. As mentioned before, gold has an appreciating value and it still remains one of the most popular mediums in the country. However, today, you don't have to invest in physical gold; you can invest online to garner similar returns. Returns: It is a volatile medium. However, in the past, the returns have not turned negative. Risk Factor: It is relatively less risky.
RBI Tax-Free Bonds What Is It: These are suitable for individuals who fall in the high-income category. The returns are slightly better than the fixed deposit and taxable bonds because after deducting tax, the returns of the latter avenues become lesser than tax-free bonds. Returns: As of 2020, the returns stand at 5.5%. Risk Factor: The risk factor is quite low in this avenue.
National Pension Scheme What Is It: NPS is aimed at providing pensions to the citizens. Investors can regularly deposit money into this account. Once retired, investors can withdraw a lump sum amount and the rest is paid annuity. Returns: Since there are various NPS schemes, the rate of interest cannot be generalized. However, as of now, the interest is approximately 8-9% for a five-year period. Risk Factor: The risk is low since it is a government-sponsored initiative.
Pradhan Mantri Vaya Vandana Yojana What Is It: This scheme is offered by the Life Insurance Corporation of India (LIC); this scheme is only for senior citizens above the age of 60 years. The investors of this scheme will get a fixed return either monthly, quarterly, half-year, or annually, depending on the plan they choose. The maximum amount that can be invested is INR 15 lac. If the investor dies, the money will be paid to the nominee after the investment period. The maximum pension that will be paid is INR 9,250. Returns: The returns are fixed at 7.4% per annum. Risk Factor: The risk factor is low since it's a government-backed scheme.
Public Provident Funds What Is It: It is a saving, as well as a tax-saving instrument. It is a mandatory fixture for any organization with an employee count of 25 to provide this perque to their employee. The most attractive part about this instrument is that it's tax-free. Returns: The current PPF rate as of 2020 is 7%. Risk Factor: This is a low-risk investment instrument because it is not subjected to market forces.
Today, there are various options to choose from, but it largely depends on your financial goal to see which platform suits best for you!
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Top 10 Investment Mediums To Bet On In India
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