7 investments that can give you high returns
Investments Vanguard: For upon |There was a time when investing in the share market was daunting. Without the aid of market intermediaries, it was impossible to invest and make a fortune in the long run. In fact, only the crème de la crème of the nation’s population actually had the scope of trading in the share market. It was costly and risky and it definitely demanded a lot of commitment from the investor. Without significant socioeconomic influence, it was unthinkable for an individual to succeed in stock trading and equity investment. Investments Vanguard.
Thankfully, the situation is no longer the same. The presence of several blogs, trading sites, and applications has increased the access level for all traders. Even the novice investor can now read up on stock market trends, lucrative investment opportunities, portfolio diversification ideas, and different types of share market investments available. Knowledge about share trading and the trends of the share market has become common due to the advent of modern digital connectivity. An investor can assess the risks of an investment before he or she makes a commitment. They can match their risk profile with the product. It is true that taking higher risks opens up new opportunities for portfolio diversification and high returns. However, high risks can exact a much higher price than you expect. Investments Vanguard.
What are the different classes of investment products?
To comb through your investment options, you must realize that all investment products can fall into either one of these broad categories –
- Financial assets – these are the mutual funds, public provident funds, bank FDs and stocks. The market-linked products and fixed income products mainly comprise the financial assets.
- Non-financial assets –These are more popular in the Indian market. It includes real estate and gold.
What are the seven investments that hold the promise of high market returns?
You must always remember that an investment opportunity that promises high returns is bound to involve high market risks as well. So, here are a few ways you can get ready to party in the long run. Investments Vanguard.
Direct equity
Indian investors refrain from direct equities because they are the riskiest traditional investment product. They have been around for quite a while, but they have failed to garner the investor’s trust. The only way to reduce the risk is by investing in the long term. The market fluctuations including policy changes like demonetization affect equity returns directly. However, over long periods (3 to 4 years), these assets offer returns that are often higher than the inflation-adjusted profits. They offer the highest returns among all types of assets in the Indian market. Investments Vanguard.
Equity funds: small and mid-cap schemes
The medium and small-cap schemes of equity fund investment are susceptible to higher volatility. At the same time, they promise better returns. In case you are looking forward to investing in a mid-cap fund during the initial days of trading, remember that it cannot fuel your portfolio. It will only enhance your risk portfolio and improve the returns. The minimum investment of the small-cap and mid-cap businesses should be 65% of the net assets of the scheme. Investments Vanguard.
Related Posts
Initial Public Offering (IPO)
IPO is the trending investment option since 2017. In India, several companies are launching IPOs and going public to raise capital. The initial shares that the public gets to buy and hold are in the primary market. The process requires application and allotment. Just because you have applied for an IPO does not mean you will get allotted. Moreover, on the final date of listing, the investors get to discover the prices. However, the same investors do not have any idea about the trading history of the stock. The price of the IPO is neither final nor stable. It can hit rock bottom after the listing or skyrocket to double the initial amount right after listing. Investments Vanguard.
Equity-linked savings scheme (ELSS)
The easiest way to understand an ELSS is to think of it as a type of mutual fund. These schemes may bear mid-cap or small-cap bias. There is a three-year lock-in period for the ELSS schemes. It gives them a chance to exploit the value stories in the different asset sectors. Therefore, if you have tax savings in mind, ELSS seems like a good way to start. However, the scheme you are looking at might not fetch you returns, as high as you expect. Always review all traits of an ELSS that can lead to its subpar performance before you invest in one. Investments Vanguard.
Peer-to-peer (P2P) platforms
P2P lending has become popular ever since the rise of alternative lending platforms online. It is a recent development that derives significant inspiration from crowdfunding. The easiest way to describe it would be as a public loan that is paid back by people in need of credit. These P2P platforms bring the potential borrowers and creditors together. It is a form of unsecured loan. You will not be able to interact with the borrower in person. There is always a high risk of not getting your dues, but the returns are lucrative enough to subdue the threat of risks. Investments Vanguard.
Real estate
Real estate prices are unpredictable. They can remain static for a long period and then spike when the market is conducive. There are several periods of ups and downs that directly influence the price of real estate in the Indian share markets. It shows low liquidity and requires high capital. Thus, although real estate bears the promise of high returns, only a few entitled market players can indulge in this game. Investments Vanguard.
Index-linked mutual funds (ILMF) or ETF
An ETF can offer premiums of 5.5% per year. It is possibly the least risky of all high-risk – high return options. The prices of index funds depend on the crests and troughs of NIFTY and Sensex directly. Thus, you can say that they are risky but within reason. You can reduce the risk significantly by opting for long-term investments. Investing in the short term can be very unpredictable indeed, especially with a risk premium of 5.5%. Investments Vanguard.
High-risk investments are necessary for strengthening a portfolio and boosting its aggressiveness. Besides, when you have time in your hand, surplus money, and the option of reducing the imminent risk, why should you not aim for high returns in the future? Investments Vanguard.
Comments are closed.