Where To Invest?
There are a lot of asset classes in which an investor can segregate his savings, depending on the Risk appetite, knowledge, experience, age, etc. But as a thumb rule risk taking the capacity of an individual determines his Investment Portfolio.”Higher the risk, Higher the return and vice-versa”
Primarily there are two broad Asset Classes of Investment which we will begin with:
Debt Instruments
Equity and Equity Related Instruments
Although other Asset Classes for Investment include:
Real Estate
Gold
Art/Collector’s Antiques
Debt as an Asset Class includes all those instruments which give a fixed rate of return and are highly safe some of the types of Debt instruments :
- Fixed Deposits in Banks, Private Company Fixed Deposits, Recurring Deposit, etc.
- Mutual Funds, Liquid funds, Guilt Funds, Fixed income funds, etc fall under the Debt category of Mutual funds.
- Government Bonds, Kisan Vikas Patra, Post office schemes.
- Life Insurance Traditional Plans-Money Back and Endowment Insurance Plans are also based on the Principle of a Debt.
Equity as an Asset Class includes all those instruments which are directly or indirectly invest in the stock markets-BSE/NSE(Nifty), these kinds of investments do not guarantee returns and are very risky in nature, but could be very high in return as is being witnessed today. Equity-based investments include:
- Mutual Funds-These includes Large cap, Midcap, small-cap funds, Index, Sectoral, Diversified Funds, etc.
- U.L.I.P (Unit linked insurance Plans)-These type of insurance Plans have investments in the Stock Market or Equity.
- Stock Markets-Directly entering the stock markets via trading on the NSE/BSE stock exchange by opening a demat and trading a/c with any third Party Brokers.
- NSE/BSE stock exchange by opening a demat and trading a/c with any third Party Brokers.