Investment Options In India - V1

Investment Options In India

       there are so many investment options in india which provides good returns and helps one to take early retirement but today in this blog you'll get to know about three major kind of options which are the most preferable and profitable investment options in india. but before that let's clear the concept of investment, why should one will start investing?

      As we all know in olden days peoples used to save their money in piggy banks or at home which does not give them any returns at all. After sometimes peoples starts to save their money in bank accounts, fixed deposits, recurring deposits, etc from where they can receive a limited returns of around 5% to 7% which could be a good option for saving and complies with the security options but it does not provide returns according to the ratio of inflation.

      As in india inflation also increases with the percentage of 5% to 6% which decreases the value of money. To get rid of this many people's start investing in various different things like stocks, mutual funds, etc. As this investing may provide upto 15% to 20% of returns on the total investment and if one can hold his investments for longer time than one may also see the power of compounding, this investment gives a good returns on timely basis and along with that the face value of the investment also keeps on growing.

These three best investment options are :- 

  • equity
  • mutual funds
  • commodities

1. Equity -

       nowadays, investing in equity market is the best investment option in india, as one can expect 15% to 20% of returns from the holdings, according to experts it is the most preferable and profitable investment option. as compared to fixed deposits and recurring deposits investing in stock market helps to get rid out of inflation in a better way.

       however, all the amount invested in these fd's and rd's are also get invested in the stock market. as you may know inflation rises with 5% to 6% on yearly basis stocks can gives higher returns to deal with it properly. so banks and financial institutions are also invest our investments in the stock market.

       when we invest in an equity, it means we are investing in a company which is listed in national stock exchange (nse) or bombay stock exchange (bse) which is regulated by the securities and exchange board of india (sebi) guidelines.

       after we invest in a company if that company performs well during the financial year than it is said to be obvious that the stock price or we can say the share price of the company will increase for sure, similarly if the company does not performs well during the financial year then it will also put an adverse affect on the stocks. however by analyzing company financials, charts, annual reports, etc one can make a better decision of where to invest. as many of the peoples had created their wealth just by making ethical investing some of those are - warren buffet, benjamin graham, etc.

       however mostly those peoples invest in the stock market who had enough knowledge about it and who loves to take risks to get a better returns in future. as it provides the higher returns and helps to deal with inflation it is the best option for making investment.

2. mutual funds -

       investing in mutual funds is also one of the better options from which one can receive a good returns as here also the total investment amount will go directly into the stock market. in a mutual fund portfolio there were so many holdings of different different companies and when we invest in any portfolio it means we are investing in all of that companies at one time.

       as the whole amount goes in the equity market one can expect returns upto 20%, however mutual fund also consist of three types that is equity mutual fund, debt mutual fund and hybrid mutual fund.

  • in equity mutual fund the complete investment will be get invested in the equity market. here one can expect returns upto 20% and along with that the risk factor is also high
  • in debt mutual fund the complete investment will be get invested in the top debt mutual funds that is government bonds, corporate debt securities, money market instruments, etc here the expected returns are upto 8% and there is no risk of bearing loss and along with that by investing in this kind of mutual fund one can also receive tax benefits on returns upto rs 1 lakhs on the basis of long term capital gains.
  • in hybrid mutual fund partial amount of the investment will be get invested in the equity market and the partial amount will be get invested in the debt market. there is no fixed ratio of distribution of the total investment. one can expect returns upto 13% on the total amount as the there is average risk due to vast diversification of funds.

       as you can see in the above image this mutual fund of icici prudential technology direct plan growth had provided 35.93% of returns in last 5 years which is really a good returns. for every particular mutual fund there is a fund manager who allocate the funds in various companies in a diversified way to reduce the risk of getting loss.
      there are 43 holdings of this mutual funds it means the fund manager of this mutual fund had distributed the whole investment amount from investors in 43 different companies.

      as you can see some of the companies in which this mutual fund had been invested. so when someone invest in this mutual fund it means he can get the units of this companies from mutual funds whenever this companies make profits or loss the investor gets his profit by the average of this companies growth or declining rate. however investing in mutual fund will also help to create a habit of investing to take a step forward to the financial freedom.

3. commodities
      investing in the commodity market is the third best option in india, commodity market includes all the things that generates from nature such as gold, silver, grains, crude oil, etc. according to experts one must invest in commodity because it helps to deal with the inflation issues for example if the someone invests in gold and in near future if the gold prices rise then it means the value of his commodity portfolio will also increase.
      similarly if someone invest in crude oil and if the price of this commodity rise due to any reason than also the value of his investment rise. mostly this kind of investments are done with a view of gaining better returns and face off the problem of inflation.

     nowadays, peoples also likes to invest in digigold provided by various brokers some of them are groww, icicidirect, paytm money etc. 

( note :- if any one wants to invest in all of this options than we would like to prefer groww app to invest, as it has so clear interface and very easy to use. one can invest in stocks, mutual funds and also in soverign gold bonds as well. it is already downloaded by more than 10 millions of peoples and it had 4.2 star rating on google play store.)

( disclaimer - all the information provided in the blog are based on the facts available on google. no information is provided by the authors view.)

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