We live in a brave new world where possibilities are endless. When it comes to investments, gone are the days when our earlier generations didnʼt have much to look beyond real estate, fixed deposits, gold and a few blue-chip stocks. While these well-known investment options remain, numerous lesser-known investment products are ready to diversify your portfolio and test your financial acumen. What this article does for you is spread across a rainbow of possibilities. The possibility of investments can be the possibility of growth, the possibility of steady and high returns, the possibility of wealth preservation, and eventually the possibility of a secured financial future.
Risk and reward go hand in hand in investments. And this is where portfolio diversification comes into the picture. A spectrum of investment vehicles offers ample scope for diversification. We try to touch upon as many investment options as possible, knowing that it may not be possible to cover it all in one go. Nevertheless, regular readers of Compass will come across all of them at some point.
If you consider from a common personʼs perspective, there are several “safe bets” that encourage them to save money without any worry. Prominent among them are the following,
Apart from these saving and deposit schemes, there are other debt instruments like,
If you want to up your game in terms of risks, you can invest in the market or market-linked investment vehicles. The share market can be a very profitable option but is also particularly vulnerable to market risks. If you want to trust the judgment call of a professional fund manager instead of your own, you can invest in equity mutual funds. With Futures and Options, you get another mode of the market investment. However, a solid understanding of the financial market is recommended before you invest in F&O
Apart from equity mutual funds, you can also invest in debt mutual funds which provide a low-risk steady income. Hybrid mutual funds of equity and debt instruments are also available in varying proportions. You can choose these funds as per your risk appetite.
Among tangible assets, real estate is a popular investment. Be it a plot of land, residential property or a commercial space, investments in real estate can have rich returns. However, you have to check the state of the industry both at the time of purchase and sale.
Gold and precious metals are preferred investments in Indian households. It diversifies your portfolio because of its traditionally inverse relationship with the market. Gold is available in a variety of forms. Apart from physical gold, you can invest in paper gold, like Sovereign Gold Bonds, liquid gold like gold Exchange-traded funds, or even digital gold.
Art and Antiques can be an investment, although it is a passion for many. If you have an eye for aesthetics, you can earn a fortune by buying an artwork early and selling it when its value rises.
Moving on to the dynamic side of the investment world, new investment instruments are emerging all the time. Expensive assets are brought within the reach of average investors with Fractional Assets. Here you can buy a small percentage of an expensive asset, usage rights, profit percentage on sales and also the rental income that it generates.
Non-Fungible Tokens can be seen as a digital avatar of artworks. Artists create an encrypted and unique digital copy of their artwork and sell it to the highest bidder, or at a stipulated price. Buyers invest in them as a keepsake or in hopes of a value appreciation in future.
Almost impossible to ignore these days is the world of cryptocurrencies. These are decentralized currencies that you can buy and sell from platforms. Using the highly secure blockchain technology, cryptocurrencies like Bitcoin and Ethereum have shown astronomical growth since their launch. However, these investments are highly sensitive to market trends. So, constant monitoring of your investment is advisable.