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Types of investments available in India

Investors are always on the lookout for promising avenues to invest in. Today, there are many asset classes in India for investors to choose from. If you are a novice investor, it is important to learn the basics of investing and explore the different types of investments that can help you meet your financial goals. Some of the key asset classes available in India are:

  • Equity: It involves investing and trading in stock markets through the buying and selling of shares. This asset class is comparatively riskier than other types of investments in India, but it also offers higher returns. You need to regularly track the market and thoroughly research the stocks in your portfolio when making equity investments.
  • Mutual Funds: These funds are managed by professional fund managers who invest money in stocks and bonds collected from a pool of investors. The benefit here is that you do not need to actively research where to invest, as professional managers do exactly that for you. However, you must pay a fee to mutual fund houses for investing in mutual funds.
  •  Bank Deposits: Most banks today offers deposit products in fixed deposit (FD), recurring deposit (RD), savings account and other types of deposits. These are considered safer investments than Stocks or Mutual Funds but they also typically give lower returns. The returns vary from product to product and from bank to bank.
  • Real Estate: This asset class involves the purchase of residential & commercial properties to generate rental income and in anticipation of an appreciation in property prices. The one drawback for real estate investments is that they can be illiquid.
  • Gold: Historically, people in India have preferred physical possession of gold in the form of jewelry. Gold is considered a “safe haven asset” that usually gains traction during times of stock market volatility. However, guaranteeing the quality of pure gold & safety are two concerns that come to mind when considering an investment in physical gold. To circumvent these problems, investing in gold is possible through other routes such as e-Gold, gold bonds and gold ETFs that are traded on exchanges.

There are many other asset classes available to investors today. Some of these can be complex to understand for novice investors. Therefore, we will cover them in more detail in the coming weeks, once you are clear on the basic concepts of investing.

If you want to be an informed investor, you must learn the basics first. Learn investing with MProfit as you embark upon your investing journey!

15 March, 2021