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Best Investment Options for 2021 - High Return of Money

 Best investment options for 2021

Best Investment Options for 2021 - High Return of Money
Best investment

Most of the investors want to do their investments in a way that makes them get high financial returns as quickly as possible without risking losing the initial funds. This is the reason why many always look for the best investment plans as they can double their money in a few months or years with little or no risk.

The combination of high return and low risk in an investment product, unfortunately, does not exist. Risks and returns are directly related, they go hand in hand, that is, the higher the returns, the higher the risks and vice versa.

There are two clues in which investment products fall, namely financial and non-financial assets. Financial assets can be divided into market-related products (such as stocks and mutual funds) and fixed-income products (such as a public provident fund and bank fixed deposits). Non-financial assets - many Indians invest via this mode - such as physical gold and real estate.

While determining your investment path, you must match your risk profile with the risks associated with the product before investing. There are some investments that carry high risk but have the potential to yield higher inflation-adjusted returns than other asset class in the long term while some investments come with lower risk and therefore lower returns.

best way to invest in financial goals.

1- Direct Equity - Equity Market

Equity investing may not be the best choice for everyone because it is a volatile asset class and there is no guarantee of returns. Moreover, not only is it difficult to choose the right stock, but the timing of entry and exit is also not easy. The only silver aspect is that, over long periods, equity has managed to generate higher returns from inflation-adjusted returns than all other asset classes.

The risk of losing a significant portion or even all of your capital in this market is high unless one chooses the stop loss method to minimize losses. In a stop loss, one places an advance order to sell a stock at a specified price. To reduce the risk to a certain extent, you can diversify across sectors and take advantage of the market. To directly invest in equity, one needs to open a demat account.


2- Equity investment

Equity mutual fund plans invest mostly in equity stocks. According to SBI regulations, the mutual fund system must invest at least 65 percent of its assets in shares and equity-related instruments. A stock fund can be actively managed or passively managed.

In actively traded funds, returns depend to a large extent on the fund manager's ability to generate returns. Index funds and exchange-traded funds (ETFs) are passively managed, and they track the core index. Stock charts are categorized according to the market capitalization or sectors in which they invest. They are also categorized by whether they are domestic (investing in shares of Indian companies only) or international (investing in shares of offshore companies).

3- Debt mutual funds

Debt mutual fund plans are suitable for investors who want steady returns. They are less volatile and therefore considered less risky compared to equity funds. Debt mutual funds mainly invest in fixed interest-generating securities such as corporate bonds, government securities, treasury bills, commercial paper, and other money market instruments.

However, these mutual funds are not risk free. Carrying risks such as interest rate risk and credit risk. Therefore, investors should consider the risks.

4- Fixed bank deposits

A bank fixed deposit is a relatively safer option (than stocks or mutual funds) to invest.

5- Real estate

The house you live in is for self-consumption and should never be considered an investment. If you don't intend to live in it, the second property you buy could be your investment.

The location of the property is the single most important factor that will determine the value of your property as well as the rent you can earn. Investments in real estate generate returns in two ways - raising capital and renting. However, unlike other assets.

6- Gold and or Silver

I recommend that you invest about 10% of your net worth in gold or silver. The reason for owning gold or silver, is that it acts as an insurance policy. That is, actual, physical gold, not ETFs. It’s best practice to keep your gold and silver in a safe storage by a reputable company. It’s also a good idea to keep some physical gold in your own safe at home for worst case scenarios.

What should you do?

Some of the investments mentioned above are fixed income while others are related to the financial market. Fixed income and market-related investments play a role in the wealth creation process. Market-related investments offer the potential for high returns but also carry high risk.
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