Investment is a topic which can make anyone scratch their head. Should it be in real estate, the stock market, mutual-funds or fixed deposit? Whenever there is extra cash or have an amount which just got matured from other forms of small investment or probably inherited their ancestors’ assets, the first thing to do is to plan out the viable options for making the investment. There are various options which have been created for investment purpose but, you have to be careful, as to know what is going around, how are the stock markets performing, what is the current status of real estate, is it rising or has it stalled for long. Then, how is the interest rate for the banks’ fixed/recurring deposits, are they giving returns more than the expected return rate?
There are many investment options mentioned above, let us discuss them in brief and see which option is worth investing for.
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1. Real Estate Investment
Seeing the charts and the trend, until now, the most appreciated and noted investments that have been made are into real estate. Reason for it to happen is due to the real investment returns sans 2007-08 period. They provide the best of the returns with an opportunity to buy a physical asset which can be used, rent or even sell at an appreciated price. We know there is risk involved but where isn’t. If you want to make the investment it has to be done with a thorough research, awareness and a bit of calculative risk. The other reason being is you can get an option for making a fraction of payment if you do not have the readily available funds. Which means you can have the asset without making complete payment and use it as per your will, isn’t it a great option? Yes, I know. But just hold on your horses and let us see if other forms can be as effective as this one.
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2. Stock Markets
A stock market is an option which most of them think of making money easily. That is a wrong notion. It is a myth because there are more stories of people losing their money rather than making a fortune for themselves. Careful study is required and still after those understanding there is a luck factor needed. One bad news for the company, in which you are invested, and the prices go tumbling down. It may be vice-versa, but for that, it is equivalent to flipping a coin and guessing the outcome. So, the risk factor is too great and losing upon your acquired money might be a painful experience.
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3. Mutual Funds
Just like the stock market, there is risk involved. But, in this method, the risk is lower than the stock market because you are not investing in only one company and the fund-houses manage your money in a number of stocks in one mutual-fund. You can either pay a lump sum or monthly instalments. Still, the stock market risk is present, as the stock price increase so does the value of your mutual fund.
4. Fixed Deposit
Banks usually are the safest option for investing, correct? Well, not true completely. If a bank has made a loss or there is a fraud case in the bank then, the bank is not liable for your amount deposited in their accounts. It may declare bankruptcy. Even though the chances are very minute but still there is a risk and the way the rate of scams and fraud are being reported one has to be careful. Even the interest rate provided is not satisfactory, they are not worth for big investment where you can benefit from. It is a safe option but, returns are equivalent to negligible.
Just to sum it up and provide a gist:
a) To get maximum returns without maximum risk: the suitable option is to invest in real estate,
b) To get maximum returns with more of a risk: the suitable option is to invest in the stock market,
c) To get an average return with more risk: the suitable option is to invest in mutual funds and
d) To get a minimal return with no or little risk: the suitable option is to invest in a fixed Deposit.