When it comes to the world of investing, three words come to mind: overwhelming, intimidating, and scary.
Figuring out where to invest can be one great challenge. Right?
I’m sure you’ll be keen on knowing some tricks and tactics to invest in the future.
And I know, a lot of information might be like taking a toll on someone. Here’s a simple guide for you to grasp the basics of Investment & Investing.
“WHERE TO INVEST”
So, here’s a simple deal about investing especially when you’re a beginner in the market. ‘People invest for fun but expect a sky-high return without any loss‘. But the truth is risk and reward goes hand-in-hand.
There are numerous ways of investing money. From the stock market to government banks. But I’ll write down some of the handy options for you.
1. Insurance Plans
You can invest your money in tax saving Insurance Plans. Invest your money on buying Insurance for your health, assets but they don’t generate you an income. But unit-linked Insurance plans help you earn too.
2. Equity/Debt Mutual Funds
Equity mutual funds mainly invest in equity stocks. An active, as well as passive investor, can consider investing in equity.
On the other hand, investors who want steady returns and are not afraid of taking risks should go for debt mutual funds.
3. Real Estate / Physical Commodities
High net worth investors usually prefer buying a place other they where they live. Investing in properties can sometimes be a loss but usually turns out to be profitable.
Accumulating physical silver or gold in the form of coins or bars is also considered a decent investment. Even the central bank of every economy tries to hold on to as much gold as possible.
4. The Stock Market
The stock market is undoubtedly the most beneficial place for investing your money. It is one of the most common ways of earning money while sitting home.
a) Dividend Stocks – Long term investors prefer investing in dividend-paying stocks. Also, called yield stocks, are for the income-seeking investors.
“The single greatest edge an investor can have is a long-term orientation”
b) New Issues – The only reason the share market was created in the first place was because of new issues also knows as IPOs (Initial Public Offerings).
Anyone can buy or sell these shares but profits are made only if you can get an allocation the IPO before the shares list.
Because of the problem that ordinary investors had in the past to access these types of opportunities, this is still an ‘emerging’ asset class for most investors.
c) Defensive Stocks – These types of stocks do not have anything to do with the overall stock market as they provide a constant dividend. Careful, not to overload them because you might regret it during the boom.
Worth a shot, but no dramatic growth expectations out of defensive stocks.
d) Growth Stocks – Growth stocks are essentially shares in those companies that are generating positive cash flows and whose gains are expected to grow at an above-average rate in comparison to the market.
Profitable? Yes. Easy? No. Hard to find during the boom.
I hope it was beneficial.
Take care! Stay home&Stay Safe!
Suggestions would be appreciated.