Types of Investment & Best Investment Options for Beginners

What is Investing?

Investment or investing is a resource or thing which is taken with the desire so that it will make earnings or will enjoy in the forthcoming years. As an economic means, investing or investments are the purchased asset which is not being absorbed at the current time but are being used in the future to build property or wealth. In the sense of personal finance, investments are the financial asset taken with the belief that assets will produce income in forthcoming years or will be depleted at a bigger price for more benefit.

Let’s Talk More about Investment

The phrase ‘investment or investing’ might use to refer to any kind of system which is used for the desire of making money or enhancing income in the future. As a financial term, these all are included like, buying bonds & stocks, purchasing real estate property and buying any kind of financial product. In addition to investments, other means of producing goods can be taken as an investment.

Doing anything in the desire of boosting up future earnings can be treated as an investment. Participating in additional education or higher education can be treated as an investment too, as of a desire to boost ability or advanced skills of doing anything in a better way in the hope of generating more income in future.

Investment and Growth of Economic

The growth of the economy can be supported by the use of better investing or investment at a business level. When an association or company compose or achieves an improved piece of manufacturing apparatus in order to grow the total number of manufactured goods within the same aptitude, the improved manufacturing can be a reason to the nation’s GDP (gross national product) to grow. It grants the economy to rise by improved production, occupying on the old manufacturing devices investment.

Investment Banking

Investing or investment bank gives a broad range of services especially to help individual people or business in improving or growing their asset or wealth. This does not mean the traditional banking of the consumer. Rather, the investment institution target on investing or investment opportunities like wealth management or trading. Financing facility may be also giving for the desire of helping to these services.

Investments & Speculation

Speculation is an independent action from doing investments. Investing or investments includes the buying of assets/wealth with the prospect of keeping them for the long-term, while speculation includes seeking to exploit market carelessness for short-term benefits. Ownership is commonly not an objective of speculators, in other hand investors/banker generally look to frame numerous assets in their portfolios all the time.

Despite speculators are generally taking abreast decisions, speculation cannot be generally classified as traditional investment. Speculation is broadly treated higher liability compare to traditional investing or investment, by this can rely upon the type of investing or investment included.

Types of Investment Options available in India

There are many types of investment product and service available in the market to choose from. Each and every investment has its own advantages and disadvantages. You can choose one of the best investment options according to your need. Choose the right kind of investment options and invest your money wisely. Below listed are some of the popular types of investment options:

Stocks Investment

Stock investment is types of investment options which attracts the investors in India. When any investors buy shares of stocks it enables the investors to take part in the company’s success story by increasing the stock price. Shareholders have access to the company’s assets in the event of the liquidation.

Common shareholders have the right to vote in the shareholder’s meeting and right to access the dividends if the company has declared it. Preferred stockholder does not have the right to vote but able to receive the payment for the dividends as common shareholders.

Bonds Investment

Bond investment is one of the famous types of investment options for investors. The bonds are issued by the federal government plus many states, corporations, and government agencies. Investors take money in the form of a loan and paying the interest plus some amount at the time when bonds mature.

The interest rate on the bonds is taxable but some of the bonds offered by the municipal are given exemption on the tax. Bonds are like stocks, one can buy it from the secondary market. The price of bonds depends on the interest rate.

Bank Product Investment

Banks provide so many investment schemes and product. These investment options are safe among all the investment. Bank offers investment products so that you can invest your money and manage as per your requirement. There are many types of account offered by the bank like savings, current bank account etc.

Mutual Funds

Mutual funds investment is one of the best options for investors to invest their money for better returns. Mutual funds are managed by the fund managers and this fund manager invest the money in a different aspect of the market on behalf of the investors.

The value of the mutual funds given at the end of the trading day as NAV. Buying and selling the executed after the market close. Mutual funds can be in the form of dividends, capital gain & interest. All the money in this investment is taxable if it is taken as a non-retirement account.

It is the call of the time buying and selling the mutual funds can be gain or loss on the investment. Mutual funds are types of investment options which enables the small investors to invest their money within the fund’s investment objective.

ETFs

Exchange Traded Funds (ETFs) are similar to mutual funds investment but the trading is done the same as the stock exchange during the trading day. Price of the ETFs is changed after the market open where the mutual fund’s prices set by the end of the trading day.

Exchange Traded Funds (ETFs) are gain popularity among investors. ETFs are one of the best investment options for investors.

Annuities

Annuities are types of investment options where there is a contract between the insurance company and the buyer. Insurance companies promise the making payment time to time by sharing the immediately or sometime in the future.

Retirement Plans

There are so many types of retirement plans available in the market which come when you starting the investment plan. It is one of the best investment options where you can save tax by investing the retirement plans. There are the retirement plans you can choose one of them which suits you and save tax.

Initial Coin Offerings and Cryptocurrencies

These are the featuring investment options where credit rating is less and more risky to be default than the traditional investment options available in the market. There is more risk in this type of investment but they also offer much higher returns on this investment product.

Commodity Futures

Commodity futures are types of investment options where investors are given the opportunity to buy and sell the commodities at the pre-defined price and date in the future. Products like oil, metals, grains and financial instrument & currencies come under the commodity.

There is some limitation in the commodity futures. You have to trade it within the commodity campus.

Insurance

There are so many types of insurance product where you can invest your money. Like there are so many life insurance products which give options to invest and get better returns after a few years. Insurance policies are one of the best investment options available.

There are so many money back and money-saving investment plans in the market. Life insurance investment also considered safe and secure investment options because it can give you peace of mind that your money will not be wasted. There are so many other insurance investments in the market which can give you handsome returns at maturity.

Most Popular Investment Options in India

Investors look for the top best investment options while there are a minimum risk and high returns opportunity. But the fact is there is risk associated with each and every types of investment. Below are some of the most popular investment options in India.

Public Provident Fund

PPF (Public Provident Fund) is one of the most famous for saving the tax and best in the retirement plans. PPF interest and returns are free from tax liability. The Public Provident Fund has a lock-in period of 15 years. If the investors want they can extend the term of the plan after maturity. An investor can withdraw some of the money from their PPF account.

Bank Fixed Deposits

FDs (Bank Fixed Deposits) is one of the best investment options within India because this investment has fixed returns and there is no risk associated with the market. If anyone wants to open an FD account can visit the bank branch of their choice else open an FD account online using internet banking.

Some of the fixed deposit accounts have options to withdraw the money before the maturity with some penalty. It is advisable to check the terms at the time of opening the FD account. The person who has the FD account get some kind of insurance protection up 1 lakh rupees.

Debt Mutual Funds

Mutual funds offer one of the best investment options as debt mutual funds, which an open-ended debt funds. Debt mutual funds are less risky than compared to equity mutual funds. There are different types of debt mutual funds investment like liquid funds, money market funds, gift funds, corporate bond funds, and short-term income funds etc.

Debt mutual funds invest their money in the different types of bonds and government securities. All the mutual funds are managed by professional debt fund managers.

Equity-Oriented Mutual Fund Schemes

Mutual funds like equity-oriented mutual fund schemes which invest the 65 percent of the investment in the domestic companies. These types of mutual funds can be open-ended or closed-ended depends on the scheme. If you are planning to invest in this mutual funds you should consider an investment for long-term else at least for 5 years for good returns.

Direct Equity

Direct equity investment has more risk than regular investment plans. Investors who have good experience in the equity investment and ready to take the risk can hand on the direct equity investment.

National Pension System

People looking for retirement plans and wish to receive the pension amount after the retirement can invest in the national pension scheme. There are two options under this national pension scheme namely auto mode and active choice. Where in the auto mode invested amount dived based on the investors and in the active choice the amount can be invested as per the investor’s choice.

Gold

Gold is one of the all-time best investment options among investors. There is so many forms of gold one can invest in. Physical gold, digital gold, and paper gold etc. Every investor should invest some of their money in the gold to cover the other risk in the investment. Gold is the traditional investment option which is giving good returns. A few decades ago gold had delivered the double-digit returns on the investment.

Real Estate

Real estate is also one of the good investment choices for some investors. People invest in real estate for good returns. Real estate investment growing day by day and more people are started investing in the real estate.