Investment is a part of life. Every Person is mandatory to invest in the market. Now the question arises where we should have to e buy in the market, And what kind of returns should we expect from the market on our investment?
Before investing, you must choose the asset class that matches your risk appetite because we can survive in the market without considering risk and reward. The market gives money when they follow the market’s rules and regulations.
Because there is risk in the market, the story of love doesn’t work; there is only one chance you can bear, and that story goes on. That’s why we should invest as much as we can take the risk, according to the return and risk. Investments are divided into different categories.
We call these categories asset classes. I am sharing the names of some well-known asset classes below.
- Fixed Income Instruments.
- Equity
- Real State
- Community / MCX (Precios Matel)
1) Fixed Invest Income Instruments
The principal amount in the investment’s option remains safe. In this type of investment, you keep getting returns in the form of interest. You can get this return in six months, three months, and annually. This is also called like Fixed deposit.
And you can get this return even after the investment period, also called the maturity period. And in the future, you are giving back the entire capital.
Some Fixed Invests Options
1) Bank Fixed Deposit
2) Government Bonds (Issued By The Government)
3) Government Company Bonds
4) Corporate Bond
2) Equity
This is the most popular way to invest money. You are not guaranteed your capital whenever you invest in the equity market. But the returns you get are handsome and sometimes even bumper returns. Within this, the returns of each market are of different types.
For example, the US index of US30 remains about 30 to 40% annually, and the Indian market is around 15 to 20%, which is a good option. Investing in equity means buying and selling shares of companies listed on the stock market. You should have some Information about the chart in the market.
It is also called trading. The stock is traded or bought and sold through Worli Exchange. Many well-known companies have given 100% returns in the long run, but to find such companies, you will have to work hard, and with this, you will also need to be patient. These types of companies can often be blue-chip and penny stocks.
If you invest in equities for more than one year, a profit of up to Rs 1 lakh on exit from the investment is tax-free. Income above Rs 1 lakh attracts a 10% tax. Before 1 April 2018, this earning was utterly tax-free. But still, this tax rate is lower than other asset classes.
The equity is quit risky you can invest your money with any worry in this segment.
3) Real Estate
Under real estate, you can earn two types of income if you invest in an investment house, shop, or land. The first way of earning income can be rent, and the second-way payment can be from the increase in the property price, but this type of investment has a lot of complexity and confusion.
And it takes a very long time. And at the same time to invest, we need a lot of money in real estate. We cannot calculate our returns, and there is no official formula. It is difficult to comment on it as no parameter can adequately explain its returns.
In this type of business, the risk is often less because we have physical possession. And we have the material things. It may take some time to get the return, but it is a good option for those with good money.
4) Invest In Commodity
Gold and silver are well-known options for investment, which increase the prices of gold and silver in the long run; if we invest in these two according to investment for 20 to 30 years, then we will get at least 80-90 percent. You can get a return. In this, we can invest by buying jewelry or through ETF.
Considering the example given in the beginning, let us determine how small will be added if we invest in fixed-income equity and bullion for 20 years.
- If we invest the money in fixed-income investments and get an average return of 9% per annum, we will get 3.3 crores.
- If invested in ETT for 20 years and the return is Aston 15% per annum, then we will get Rs 4.4 crores.
- I am assuming the return on investment in bullion, i.e., gold and silver, at 8% per annum, then Rs 3.09 crore.
Important things related to investment-
While investing, we must remember that we will not support all the capital in any asset. It is essential to divide investments into different asset classes, which is called asset allocation.