What Is The Best Investment In India | Which Stock Is Best To Buy Now?

 

Whenever we think of investing our hard earned money, it is reasonable to consider the safest and smartest options available in the market. As an Investor, we should consider several factors along with the rate of returns such as our own risk bearing capacity, tentative expectation of returns, and the time span of maturity. 

Like every other thing, choosing a right option of investment is also a subjective matter. One should do it according to his/her own rationality, market understanding. Here, in this article we are going to discuss some of the popular investment option for beginners as well as intermediate investors.

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  • Fixed Deposit: It is one the safest mode of the investment with limited returns but high assurance of getting your money back. If you want to play safe then this particular option is for you. Many times investors consider FDs in their portfolio. This is an extremely old fashioned way of investing but still popular in Indian society. If we study the psyche of traditional Indian investor then there is a high probability of him/her investing in the Fixed Deposit.
  • Mutual Funds (Debt/Equity): The proper amalgamation cum combination of different stocks, bonds and sometimes debts are widely known as this term called Mutual Funds. Smart investors are likely to consider this option to invest. Your risk is divided into many factors as returns are directly proportionate to market volatility and ones’ choice of portfolio. It is far better than many other alternatives available. If you are a risk taker and want to earn reasonably better than others then, this is the best way to start with.  
    • Merits: High liquidity & Better chances of getting good returns. 
    • Demerits: Returns dependent on market fluctuations & choice of portfolio matters at the end.
  • Real Estate: This is one of the most popular and traditional alternatives of investment option in India. Developing countries have this advantage of booming real estate market with high potentials. A country like India where infrastructure has been developing on fast pace, investor has great choices to invest in real estate, especially in tire 1, 2 and 3 cities. 

Especially when someone is looking for long term investment then, tire 2 and 3 would be great choice as prices may have chances to go up due to space for development. Residential or commercial properties in the tire 1 cities would be costly but it has higher liquidity as well. Apart from the private residential and commercial, there are good options for investments in public infrastructure development as well. 

  • Merits: Can give cumulative returns in the long terms. 
  • Demerits: Sometimes it is difficult to liquidate on desired prices.
  • Pension Scheme (PPS): Pension schemes are also helpful to provide support when one has stopped working. One needs to pay some predetermine amount to the respective scheme account for some specific time period until it gets matured. It sounds better when one becomes old and stops working. Many private sectors employees invest in this scheme to secure their old age. This scheme provides some fixed amount on monthly basis to beneficiary’s account.
    • Merit: It provides financial benefits after one stops to work.
    • Demerits: Accessibility is rare and it is not possible to know where your amount is being invested by the scheme promoters.
  • Provident Fund (PPF): A small portion of salary is to be contributed to PPF account by employee for the sole purpose of securing retirement age. This is also one of the most reliable long term schemes to support old age days. This is run by Indian Government. 
    • Merits: Relatively gives higher returns as opposed to FDs and many others options. It also gives a form of guarantee to its investors once it gets matured. Investment in PPF is exempted from tax for employee and employer both. 
    • Demerits: Difficult to liquidate before maturity or before completion of specific time with present employer. Again, contribution to PPF is dependent on employer or company one is working. Company must be financially sound enough to contribute regularly towards employees’ PPF account.
  • Gold: In Indian household, gold is one of the oldest and reputed options of investment. Gold is not just an investment for Indians but it is an emotion. If we see the data trends then we can easily conclude that gold invest is beneficial in long term. But let us be very clear that gold invest as jewellery has its own side effects as one needs to incur making charges and all. But at present, paper gold and coins are also becoming popular and safe options for investment.
    • Merits: Paper Gold is cost effective alternative for long term investment.
    • Demerits: If you invest in the form of jewellery then it may have some safety issues, plus you have to incur making charges up to 5%-15% depending upon the design and jewellers. 
  • Post Office Savings: This scheme provides monthly saving option for investors. The maturity period for the same is minimum 5 years and it is fully backed by the government of India.
    • Merit: With INR.1500 only, one can open this account and start saving.
    • Demerits: There is no tax rebate on amount received from such scheme.
  • Pradhan Mantri Vaya Vandana Yojana: If someone above 60 wants to gain returns around 7.4% fixed on their investment, then this is the scheme for them. It is somewhat designed on the path of pension scheme where one can have choice to receive their income such as monthly, quarterly or yearly. With minimum amount of INR.1000, that can maximum goes up to INR.9250.
    • Merits: An Assured Pension Amount is guaranteed upon specific period of time. Up to 75% of amount can be availed as a loan once you complete the 3 years of investment.
  • Taxable Bonds (RBI): Probably, this is one of the best investment options in India where investor can get 7.75% of interest at the maturity period of 7 years. A certificate of holding is given to investors once transaction takes place.           
    • Merit: Aggregate interest can be re-invested and it can also be taken as regular income. Everyone can invest in the scheme without any upper limit of investment amount.
    • Demerits: Other options like mutual funds and debts can easily surpass the amount and proportion of the returns. 
  • Crypto (Only Legal Tenders): As we all know, crypto is the new form of investment and millennials are crazy about it. But it is better to study the channel and legality of the same, in the present country that you are in before making any move as far as investment in the crypto is concerned.
  • Initial Public Offerings: When companies offer their share to general investors for the very first time is called IPO where investors can buy the same before the listing of that particular share on any stock exchange. Once shares got listed on the exchange, the difference in the prices would become the benefits for the investors. It is also a good long term investment option if the company is good and has future vision to achieve.
    • Merits: Best option to cash out in the early stage. 
    • Demerits: If company does not do well initially or share listed on exchange opens on discount, then it may create loss for the early investor. It is better to study the company’s nature of business and its potentiality before investment. 

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