As soon as your asset allocation has been optimized, you should identify the asset classes with the best instruments, such as excellent debt funds and corporate FDs. A few high-quality stocks or one or two equity mutual funds would also be a good investment.
All that’s needed to achieve optimal diversification when investing money. To enjoy the benefits of compounding, let your money grow now with a Gratuity Calculator.
Stocks of listed companies can be purchased individually. The risk of investing in individual stocks is higher, but the returns can be better. There is a direct correlation between risk and reward. It may be wrong several times in stock markets. In the Indian stock market, however, some good companies have performed well over the years. Once again, we would recommend making this a long-term investment rather than a very short-term one. There will be tax benefits associated with long-term investments. Long-term (>1 year) investments are tax-free for Indian residents.
Dividend-yielding stocks give you a regular income that can be reinvested. This encourages you to be a long-term investor rather than a trader. These companies are generally more stable, well established, and therefore have lower risk levels.
Today, there is a real slowdown in India’s real estate sector (2015-16). However, real estate investments in India are likely to be profitable at the moment. We have seen a few ready-to-move-in schemes that cost the same as 2 years ago. Now is the time to take advantage of this savings opportunity. Real estate builders are hard to find in India. If someone sues you for the scheme you invested in, you will be stuck in a loop for decades, which will be painful and disastrous for your business.
Funding a Startup:
Prime Minister Narendra Modi is inaugurating startup India right now in India. There will be some companies that may need funding, so for sure, there will be some. You can become an angel investor for them. A company that does really well can earn huge returns from this investment. Additionally, there are tax benefits for the first three years.
Jewelry made of gold incurs additional charges (on average, these charges range between 6-14%). Under the same category, gold ETFs, gold coins, and sovereign bonds can also be found.
National Pension Scheme
The PFRDA (Pension Fund Regulatory and Development Authority) manages the investments in this product. Based on a long-term time horizon, it is designed with retirement in mind. Equities, fixed deposits, corporate bonds, and government funds are all included in the portfolio. Depending on your risk appetite, you decide what proportion to use.
Bank fixed deposits are one of the most traditional forms of investment. Compared to other financial products, they provide security and are regulated by banks. Fixed-rate bank FDs also provide a consistent income due to a fixed interest rate. Therefore, extremely conservative investors prefer FDs. In contrast, company fixed deposits offer higher interest rates than bank fixed deposits. Clearly, it is riskier than bank FDs, and one should thoroughly analyze and invest in it.
Bonds offer better returns than Fixed Deposits (depending on coupon rates, etc.) and are generally safer than mutual funds or equity investments. Government-regulated bonds may also be considered safer than mutual funds.
There are many benefits to investing in mutual funds, such as good returns, great diversification, and reduced risks. However, before making any investments, please check the rules for NRIs. One of the great benefits of mutual funds is that they offer a wide range of choices you can evaluate with a Gratuity Calculator. In addition to blue chip and midcap funds, small-cap funds, large-cap funds, dividend-yielding funds, high-risk funds, and bond funds, many other types of mutual funds are available.
Post Office Savings Schemes (POSS)
The higher return on Post Office Savings Schemes makes them popular. In general, the monthly income plan of POSS is most suitable for retired people or those who need regular income. Due to the fact that it is a government savings scheme, the risk is very low. A POSS also does not have any TDS.
The Post Office offers various schemes, including National Savings Schemes (NSS), National Savings Certificates (NSC), Monthly Income Schemes, Recurring Deposit Schemes, and Kisan Vikas Patra. There are many post office investment options, but NSC for 10 years may be the best option due to its guaranteed return amount. NSC can provide a decent return on investment if you don’t want to take risks and the investment period is 10 years.