I’m trying to understand the various ways people invest their money like mutual funds, stocks, fixed deposits, real estate, gold, etc. Would love to know which types are best for short-term vs long-term goals, and how to match them based on risk appetite. What has worked for you personally? Let’s discuss!
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Different types of investments are-
1.) Bonds-
It means that you are lending money to company(corporate bonds) or to government( government bonds). Buying a bond implies that you hold a share of an entity’s debt and are entitled to receive periodic interest payments and the return of the bond’s face value when it matures.
2.) Equity Investment-
It is direct ownership in a business purchased through a stock or share. You can make money on a stock if the stock itself increases in value or if the company pays a dividend to shareholders like you. Generally we expect higher returns than bond because of the higher risk we take by investing in stocks.
3.) Funds-
Two most popular funds are mutual funds and ETF.
Mutual funds are professionally managed funds investing in a mix of stocks. Ideal for those who want diversification without picking individual stocks.
ETFs (Exchange-Traded Funds) are investment funds that are traded on the stock exchange, just like individual stocks. They are designed to track a specific index, sector, commodity, or asset such as the Nifty 50, Sensex, gold, or government bonds.
4.) Real estate-
Real estate is a popular investment option that involves buying, selling, or renting physical properties such as residential homes, commercial buildings, or land. It offers the potential for long-term capital appreciation, regular rental income, and portfolio diversification.
5.) Commodities-
Commodities are physical goods that can be traded or invested in, typically through the futures market. They offer an opportunity for investors to diversify their portfolios and for producers or buyers to hedge against price fluctuations. Commodities include a wide range of products such as precious metals (like gold and silver), energy resources (like crude oil and natural gas), and agricultural goods (like wheat, coffee, and cotton).
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There are many factors at play here like time, risk appetite, returns expectation, invest amount so I wont cover all but follow these general rules
To simplify I’m assuming you don’t have life changing money just a common person so:
If you are in your 20s invest in Equity like shares, mutual funds etc.
If you are in your 30s invest in Gold, Bonds.
If you are in your 40s invest in Real estate, Bonds, FD’s etc.
Or if you have much more money just give your money to PMS (Portfolio Management Services) and it will be sorted by their end.
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What is Portfolio Management Services? How does it work?
best investment in life is land, relationships, skills and your health, (in no particular order) everything else is fluff my friend
Basically Smart people regulated by SEBI, working to prove each how better in that common people like us gets the benefit as they manage money far better than the average joe
but you need minimum 50 Lakhs to start it