|Investment Options||Type Of Risk Involved||Comments|
|Low Risk||Assured returns and safety of capital|
|Low Risk||Government sponsored savings and retirement planning investment.|
|Low Risk||Endowment Plans with assured payouts|
|High Risk||Investing directly in stock markets.|
|High Risk||Investing in equities is through mutual funds|
|High Risk||Opportunity to select a product suited to their risk profile and investment objectives|
Low risk investment options
Not being comfortable with sharp movements in your investments means you should avoid equities. So opting for low risk investment options is a good idea. All these are low risk - low return investments, which is natural, since risk and return go hand in hand.
Fixed deposits (FDs) are well-suited for the risk averse investor. With the proposition of assured returns and safety of capital, FDs rank high on his to-invest list.
The Public Provident Fund (PPF) is a government sponsored savings and retirement planning investment. It is particularly meaningful for individuals who do not have a structured pension plan covering them.
Securing the family's finances in his absence is the key responsibility of the breadwinner. The best way to achieve this is by opting for an endowment (protection) plan or a life insurance plan.
An endowment plan is a 'with profits' plan that offers life cover combined with savings. There is a payout regardless of whether the policyholder survives the term or not.
Traditional endowment plans invest primarily in fixed income securities like government bonds and corporate paper and are well-suited for low risk investors.
High return investments
For investors with an appetite for risk, there are just as many options, all revolving around equities. Listed over here are the more relevant ones:
Equities offer risk-taking investors the best chance to achieve their financial goals. While every asset is important in its own peculiar way, over the long-term equities have a proven track record vis-Ã -vis other assets and cannot be ignored.
One way to make the most of equities is by investing directly in stockmarkets. This requires some skill and time since studying companies, sectors, economic factors, requires considerable resources. So direct investing is not for everyone.
For those who cannot invest directly in stockmarkets, there is always another way, explained under the next option.
If you lack the requisite time and effort, the best way to go about investing in equities is through mutual funds. Mutual funds are managed by fund managers, who are experts and stand a better chance of succeeding at identifying the right companies.
ULIPs or unit-linked insurance plans are a variant of the endowment plan with investments in the portfolio being linked to stockmarkets. They offer risk-taking individuals an opportunity to select a product suited to their risk profile and investment objectives. Since ULIPs offer many options, individuals with varying risk profiles can consider investing in them.
Investing in a portfolio works best
Investing is not black and white i.e. there are no pure low risk or high risk investors. Considering various investment types, Most investors are a bit of both i.e. they likely have an appetite for risk; there is only a variation in intensity.
So it makes sense to invest in a mix of assets across low risk and high risk investments. This works best when invested in a portfolio with allocations to various investments based on risk profile and goals.
Income Tax Slab 2021-22
February 17, 2020
Income Tax Return Guide - Details You Should Know
November 07, 2016
Best Tax Saving Investment Options in 2022 (FY 2022-2023)
November 08, 2016
Subscribe to get the latest articles directly in your inbox
14 Best Investment Options In India
October 30, 2018
Short Term Investments: Top 11 Short Term Investment Options For 2022
November 08, 2016
Insurance vs Investment - Did You Get the Right Financial Plan?
November 05, 2018
Popular & Recent Articles
How to Plan for Retirement as Per your Age
"The thumb rule for retirement planning is - the earlier you start, the more you save. However, with age, your priorities change too. So, you need to factor in the cost of living in the present vis- a -vis future."
HDFC Life Insurance Company Limited. CIN: L65110MH2000PLC128245, IRDAI Reg. No. 101.
Registered Office: Lodha Excelus, 13th Floor, Apollo Mills Compound, N.M. Joshi Marg, Mahalaxmi, Mumbai 400 011. Email: [email protected], Tel No: 1800-266-9777 (10 am to 7 pm). The name/letters “HDFC” in the name/logo of the company belongs to Housing Development Finance Corporation Limited (“HDFC Limited”) and is used by HDFC Life under an agreement entered into with HDFC Limited.
For more details on risk factors, associated terms and conditions and exclusions please read sales brochure carefully before concluding a sale.
|BEWARE OF SPURIOUS PHONE CALLS AND FICTIOUS/FRAUDULENT OFFERS