Financial investment is something that scares most of us. We all strive to earn and save so that we reap the benefits few years down the line, and that’s where we need to understand the importance of investments. The first and foremost thing that one has to ponder ‘What are my short term and long term goals?’ Everyone’s goals differ as per the personal need and requirement and therefore one has to make a wise decision to select the option which fulfills the requirement at its best. While we save money the trick is to make money work for us. Let’s review the investment options available especially for the newbies:
- Term Deposits: The safest way to invest money is to opt for term deposits both short term and long term based on your respective goals and dreams. Opt for the bank which offers you maximum rate of interest and get your investment started.
- Bonds: They can be categorized under the fixed income securities, and can be defined in simple language as money being granted to company or government. In return one earns a fixed amount at a regular interval. The option being less risky, the returns can be rated as low.
- Stocks/Equities: One of the best ways to become a part owner of a company is to invest in its shares and stocks. As compared to bonds, stocks are more volatile and highly risky. But at the same time one has to do extensive research to select companies which has good potential of growth in next 5-10 years. These can form a part of your portfolio for your long term investments. Also you can opt for companies which can deliver you returns at short term interval. For newbies, it is strongly advisable to start off with the help of a financial advisor though.
- Mutual Funds: If you are not sure of investing in specific company or specific bonds and don’t want to invest time and money in doing extensive research then mutual fund is the answer. Every mutual fund comes with a Fund Manager who on your behalf would allocate your money based on the theme of the fund and the respective industry segment. At the same time you have to carefully choose mutual fund based on respective parameters.
- Others: To add on to the list of available options, you also have options such as commodities like gold and silver; followed by FOREX and real estate etc.
The best way to start investing is to invest as little as possible in a disciplined manner and watch the investments grow. One word of caution – keep a track of your investments and take a decision either to stick to or exit based on the performance of your investment options.