Where to invest money for good returns in India in 2020 and 2021?

By: Bhavya Kaushik0 comments

Invest in Direct Equity

For the risk-loving investors, investing in direct equity and stock trading always sounds exciting and holds attraction. Though the equity market suffered losses at the beginning half 2020 on the pandemic fears, the market is correcting itself. The boost within the stock market was largely thanks to the promise of the COVID vaccine which is nearly in its ready stages. This has resulted in positive market sentiments globally then, direct equity is once more wealthy.

Moreover, history has been a witness that the stock exchange always bounces back even after a crash, whether it had been the Harshad Mehta scam or the 2008 crash. If you invest over an extended-term period, direct equity is understood to yield exponential returns.

Invest in Mutual Funds

For investors who don’t like direct exposure to equity but want to take a position during a diversified portfolio, mutual funds are the great solutions. Mutual funds are beneficial because –
They help you own a diversified portfolio. They come in several variants and you’ll choose a scheme which has relevancy to your investment preference and risk appetite. ELSS funds allow you the advantage of tax saving on your investments. They are professionally managed to permit you to take a position within the best stocks and instruments. You can invest in open-end fund schemes with as low as Rs.500 making them ideal for small-time investors too who want market-exposure with limited savings.

Given these benefits, the open-end fund market is another avenue which you’ll explore. Equity mutual funds are less risky compared to direct equity due to the diversification that they supply. As far as returns are concerned, some equity funds have even outperformed the stock exchange in several instances.

Invest in Peer-to-peer Lending

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 17% 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.

Invest in Fixed Deposits (FD)

This is the avenue for traditional investors who are averse to any quite market risk and need secured and safe returns. Fixed deposits are an Indian favourite for an extended time and this favour isn’t getting to end anytime soon. The rate of interest on fixed-income instruments, including fixed deposits, has been slashed in recent times, fixed deposits still find investors for the security that they promise. The recognition of fixed deposit schemes, especially when volatility struck during the pandemic, increased and therefore the trend is predicted to continue in 2021.

So, if you would like to be safe together with your investments, you’ll choose fixed deposit schemes. However, don’t dedicate an outsized portion of your investment in fixed deposit schemes. Direct about 5% to 10% of your investment in fixed deposit schemes and therefore the rest should be invested in other market-linked avenues.

Conclusion 

Choose one among the choices wisely and earn higher returns. But better understand the avenues before you select them then pick suitable options supporting your investment needs, financial planning in 2021 and, most significantly, risk profile. Also, monitor your portfolio regularly so that you’ll make changes thereto as per your changing financial needs and market dynamics and keep your portfolio profitable altogether seasons.

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