Selecting the Best Investment Option – Investor’s dilemma!

By: Bhavya Kaushik0 comments

Investing is allocating money towards assets within the hope of creating your future better. Investments are made with the view of earning returns, which grows your amount invested to a better sum. But are you in a dilemma to know which investment is best for you and would offer you better returns than other options? We’ve covered the subsequent during this article:

  • Direct Equity

Direct equity, commonly mentioned as investing in stocks, is perhaps the foremost potent investment. Once you buy a company’s stock, you purchase partial ownership of that company. You directly invest in the company’s growth and development, which would like to possess enough time and possess the market knowledge to profit from the investment. If not, then investing in direct equity is nearly as good as speculation.

Stocks are offered publicly listed companies through the recognised stock exchanges and may be bought by any investor who has a Demat account and undergone KYC verification. Stocks are ideal for long-term investments. You’ve got to actively manage the investments as various economic and business factors influence stocks. Also, you would like to know that the returns aren’t guaranteed and be willing to assume the associated risks.

A sort of safe investment with far better returns than the normal sort of investment.

Peer-to-peer investment may be a sort of direct lending of cash to individuals or businesses without a financial organization participating as an intermediary within the deal. 100% online-based platforms that match investors with potential borrowers who have registered themselves on the platform. Before allowing the investors and borrowers to start their activity, due diligence is administered to lower the danger associated and to regulate the default rate. The most ideal is to urge higher interest for investors by lending out the cash rather than saving it. 

  • The borrowers on Peer-to-peer platforms come from an outsized demographic pool, primarily consisting of salaried individuals. 
  • Peer-to-peer lending companies also offer tangible benefits for people that want to take a position on their money and obtain higher returns than they might from conventional investments like mutual funds, stocks and glued deposit accounts. 
  • An investor can earn up to net returns of 15% p.a. Moreover, sustained high returns on investment make Peer-to-peer lending a sought-after investment option for fixed income investors. Across all over the world, it’s used as a diversification tool by HNI’s and institutions.
  • A mantra for default risk mitigation is Diversification of lending amount among many borrowers. Optimal diversification can vastly improve the performance of your Peer-to-peer investments. Also, ensuring high returns.

  • Mutual Funds

An open-end fund is made when the capital collected from various investors (both individuals and institutions) is invested in purchasing capital assets like company shares, corporate, and government bonds. Mutual funds are broadly classified into equity funds, debt funds and hybrid/balanced funds, counting on the extent of equity exposure. Equity-linked savings scheme (ELSS) is the only sort of mutual funds that are covered under Section 80C of the tax Act, 1961.

Mutual funds are flexible investment vehicles, during which you’ll begin and stop investing at your convenience. a person may consider investing in mutual funds. you do not get to have time or knowledge to take a position in mutual funds because the fund manager takes care of portfolio constitution, and you simply need to invest. However, it’s advisable to take a position in just those funds whose risk levels and objectives match yours.

  • Fixed Deposits

Fixed Deposits may be an excellent way to grow your savings with utmost safety. It’s one among the well-liked avenues you to deposit a payment amount together with your financier, and choose a tenure as per your convenience. On completion of the pre-decided tenure, your deposit starts earning interest, throughout the chosen duration, as per the rate of interest at which you locked in your deposit.

Thus, you get guaranteed returns on your deposit, and you select to urge your interest on a periodic basis, or at maturity. Although, the returns you generate isn’t that better as compared to other options.

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