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5 Smart Investment Options

The word investment was derived from a Latin word “Investire” which mainly means the utilization of money in terms of capital to get good returns in near future.. People in general like to earn or like to get good returns even for simple investments. Having said that, a few, to be precise 5 smart investment options are available for the customers to get going with their investments according to their need and deed. Mutual funds, Gold investments, Bonds, Real estate and recently introduced Cryptocurrency or digital currency which makes a secure and safe investment plays a major role in contributing profits to the investors thus making them the best and most widely used investment options so far.

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5 Smart Investment Options

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  1. $mart Inve$tment Option$

  2. Outline of the Content • What is an Investment? • What are the different Options? • Brief explanation of each Option • Conclusion

  3. What is an Investment? • Investment is the process of using your money to buy an asset that you think has a good probability of generating at or above market returns over time. • Remember that every investment has a risk pertained to it. But it is upto you to take the wise decision.

  4. The Smart Investment Options are: • Mutual Funds • Gold • Fixed Deposits • Real Estate • Bonds

  5. 1.Mutual Funds • Pool of Savings for multiple investors is called Mutual Fund. • It is called so because all the rewards, risks, losses or gains are shared by all the investors involved in the pool, in a proportion of their invested amounts. • Investment here can be done in two ways. • Direct • Agents

  6. Types of Mutual Funds: • Based on Asset • Equity Funds • Debt Funds • Money Market Funds • Balanced or Hybrid Funds • Index Funds • Sector Funds • Tax-saving Funds (Continued..)

  7. Types of Mutual Funds: • Based on Structure • Open-Ended Funds • Close-Ended Funds • Based on Investment Objective • Growth Funds • Income Funds • Liquid Funds • It has greater diversification and easy liquidity

  8. 2.Gold Investments • Defined as Investing money in Gold related instruments. • Two ways to invest • Physical form • Paper • Physical Gold includes Coins,Bars, Jewellery etc. • Paper Gold involves future contracts and ETFs. • Its easy liquidity makes it a smart investment option though ETFs & future contracts have lower premiums making it risky for beginners.

  9. Gold Premium Gold Premium embodies two things. Spot Price: • It refers to the current market price with which an asset is bought and sold • Calculated as per recent average bid price • Bid price is provided by professional traders Premium Price: • Added cost on the top of Spot Price • Includes topics like minting, transport, storage etc., • Their charges vary from one dealer to other.

  10. 3.Fixed Deposits • A Financial Instrument offered by Banks & Non-banking financial companies where you earn higher interest than a savings account for the money you deposit. • You will earn money in the form of interest. • You can withdraw whole money once it completes its Maturity period. • If you want to withdraw before its maturity, you need to pay some penalty. • This is a very low risk option when compared with others.

  11. Advantages of Fixed Deposits • High assurance of returns to the investors • Market fluctuations will not affect Fixed deposits • Higher interest rate is expected with great safety

  12. 4.Real Estate • Real Estate investment is one of the oldest form of investments. • It is defined as “The property consisting of land and the buildings on it, along with natural resources such as crops, minerals or water, immovable property of this nature etc.” • Broadly it is classified into 4 types.They are: • Commercial real estate • Residential real estate • Industrial real estate • Land (vacant land,farms etc.) real estate

  13. Real Estate Benefits: Investment in Real Estate provides you a lot of benefits. Some of them are: • Steady Income • Long-term Financial security • Hedge against Inflation • Wealth Creation • High tangible asset value • Portfolio Diversification • Competitive risk adjusted returns • Demand increases the value • Low volatility with good returns

  14. 5.Bonds • These are the instruments where you lend your money to the government or a company and in return they will pay you the capital along with some interest. • Investing in bonds is a good option if steady income is your goal. • These provide better interest rates than deposits. • Unlike deposits,you can sell the bond even before the maturity. • These are more liquid and volatile.

  15. Conclusion Always keep in mind that, not only these, every Investment option is associated with some risk. Infact, Investment itself is associated with risk. You need to gain good knowledge before investing in anything by thorough research and continuous analysis. Make right decisions and enjoy the fruits of investment. Happy Inve$ting!!

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