The best options for investment would depend on the duration of your financial objectives. A long term period would be more than 10 years and a short term period would be less than three years. Here are the best options for both, long-term and short-term horizons:
When it comes to long term wealth creation to achieve financial objectives like retirement or buying a home, equity mutual funds are the best options amongst the other. The reason being the best performing mutual funds in the equity category have generated annualised returns of approximately 20% in the last 10 years and Rs. 1 lac invested by retail investors has now become Rs. 6 lacs.
However, to maximise the potential of mutual funds, it is advisable to either go online and select the right mutual fund based on past performances or take the assistance of an independent financial consultant.
You must also analyse your risk appetite as there are various types of mutual funds based on risk such as large cap funds, mid cap funds, and small cap funds. There are thematic funds like pharma funds. Small cap funds are riskier than mid cap funds and so on. Even after the re-introduction of long term capital gains tax for equity, these are still more tax efficient and provide better returns than other asset classes. Certain mutual funds like Equity Linked Savings Scheme also give you tax benefits under section 80C.
What makes this asset class attractive is the correction in prices over time. This would be a good long-term investment option. Regulatory Body like the Real Estate Regulatory Authority (RERA) have ensured greater safety and transparency for buyers. Fraudulent operators are fewer in number today. Real estate is growing again thanks to rapid urbanisation, greater consumerism, and easier access to home financing options. The affordable housing segment has the potential for high returns in the long term. There are a lot of tax benefits if you take home loans under Section 80C and Section 24 of the Income Tax Act, 1961.
If you have a clear understanding of stocks, then they are the best way to generate good returns. You need to identify stocks which are trading at a price which is lower than its actual value. Then you should buy small quantities of such stocks and create wealth over the long term.
This government-sponsored scheme ensures a minimum pension for the subscriber. There are benefits up to Rs. 1.5 lacs per year and an additional Rs. 50,000 under section 80CCD (1B). There are different investment options here and in order to get good returns you can choose the aggressive option where 50% is invested in equity, 30% in corporate bonds, and 20% in gilt funds.
A PPF or a Public Provident fund account is backed by the Government of India and can be purchased at post offices and banks. It has a 15-year tenure, though you can make withdrawals from the 7th year onwards. The principal invested, the interest, and maturity amount are all tax free. The rate of interest is revised every quarter and is based on government bond yields.
When a company offers its shares to the public for the first time, it is known as an IPO. It is important to understand the fundamentals and future prospects of the company before investing in it. Investors in IPOs of strong companies like Infosys have multiplied their initial investment several times.
Systematic investment plans are a facility offered by mutual funds that allow individuals who cannot invest a huge lump sum in one go to invest small amounts on a daily, weekly, or monthly basis. This allows them to participate in the wealth creation process in the long term by investing in equity markets. You can start with as low as Rs. 500 per month and increase your monthly contribution when your salary goes up. This investment type gives you the benefit of rupee cost averaging (lowering your average purchase price).
How can I grow my money?
You can grow your money by investing on a regular basis over a long period (more than 15-20 years) in equity mutual funds as these funds offer the best post-tax, post-inflation returns in the long run.
How can I invest money wisely?
You can either take the help of online tools or engage an investment expert to guide you to invest wisely.
How do you make money investing?
You need to choose the right equity fund, invest in a disciplined way, be patient, and remain invested for the long term to make money.
Is gold a good investment?
Yes, gold acts as a hedge against inflation and protects the downside in your portfolio when stock markets are bearish.
What are good assets to buy?
The assets which diversify your risk are equity, gold, debt funds, and real estate making them good investment options.
What are low risk investments?
Low risk investments ensure the protection of your capital, and stability of returns.
What are the four types of investments?
Investments are normally made in four different asset classes, namely equity, debt, gold, and real estate.
What are the best investment options?
The best investment options depend on your investment time horizon. For long term goals, equity is the best option and for short term goals, liquid funds are a great choice.
What is a good rate of return on investments?
The best rate of return for you would be the one that would help you realise your long-term and short-term financial objectives.
What is SIP account in banking?
An SIP account in banking is the one where you can use an auto-debit facility to invest in mutual funds through systematic investment plans (SIP).
What should I do with my savings?
The first thing you should do is determine your financial objectives. These could be a comfortable retirement, buying a home, or funding the higher education of your children. Then, you need to consult a certified financial planner to find out the future value of these objectives. Next, you should calculate the amount you need to invest monthly to achieve these objectives. Once this is done, you have to decide your asset allocation (the amount invested in various asset classes like equity, debt, gold and real estate). Then you can invest your savings in various funds
What type of investment has the lowest risk?
Investment in securities which protect your capital as well as ensure stable income flow would be considered low-risk investments. Examples of low-risk investments would include savings account, fixed deposits, National Savings Scheme (NSC), fixed maturity plans, liquid funds, and floating rate funds.
Where should I invest money for good returns?
In order to get good returns, you need to first look at your time horizon. If you need the money within three years, then you can invest in short-term bond funds, liquid funds, or fixed maturity plans. These will ensure safety of capital and better returns than conventional fixed deposits or savings account.
If you are looking at long-term investments (over 10 years), then your best choice would be equity mutual funds. Equity mutual funds are volatile in the short term and there could be erosion of capital, but in the long term they provide the best returns. This is taking into consideration your post-tax, post-inflation returns.
Where should I invest my money in India to get good returns?
There are lots of investment options in India where you can earn good returns. At the top of the list are direct equities or equity based mutual funds. They provide the highest post-tax post-inflation returns over the long term among all asset classes. If you understand real estate, then you could get excellent returns here as well. You need to choose the right location (with excellent infrastructure and future growth opportunities) and find a reliable developer. For short-term investments, you can consider fixed maturity plans and liquid funds.
Which investment gives best returns?
For long-term investments, equity gives you the best returns. For short-term investments, you can invest in fixed maturity plans or liquid funds.
Which is the best investment option in India?
The best investment option would depend on your financial objectives. For long-term objectives, the best option would be equity.
Which is the best mutual fund to invest in India?
ICICI Pru Bluechip fund, SBI Magnum Multicap fund, and DSP Equity Opportunities fund are some of the best mutual funds you can invest in.
Which is the best way to invest money?
The best way to invest money is to identify your financial objectives like a comfortable retirement, buying a home or funding the higher education of your children. Once you have identified your objectives, look at the time horizon. For long-term horizons, you can consider equity. For short-term horizon, you can consider fixed maturity plans and liquid funds.
