5 Smart Investment Options

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mart Invetment Option
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Outline of the Content

• What is an Investment?
• What are the different Options?
• Brief explanation of each Option
• Conclusion

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What is an Investment?

• Investment is the process of using your money to
  buy an asset that you think has a good
  probability of generating at or above market
  returns over time.
• Remember that every investment has a risk
  pertained to it. But it is upto you to take the
  wise decision.

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The Smart Investment Options are

• Mutual Funds
• Gold
• Fixed Deposits
• Real Estate
• Bonds

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1.Mutual Funds

• Pool of Savings for multiple investors is called
  Mutual Fund.
• It is called so because all the rewards, risks,
  losses or gains are shared by all the investors
  involved in the pool, in a proportion of their
  invested amounts.
• Investment here can be done in two ways.
• Direct
• Agents

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Types of Mutual Funds

• Based on Asset
• Equity Funds
• Debt Funds
• Money Market Funds
• Balanced or Hybrid Funds
• Index Funds
• Sector Funds
• Tax-saving Funds
  

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• Types of Mutual Funds
• Based on Structure
• Open-Ended Funds
• Close-Ended Funds
• Based on Investment Objective
• Growth Funds
• Income Funds
• Liquid Funds
• It has greater diversification and easy liquidity

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2.Gold Investments

• Defined as Investing money in Gold related
  instruments.
• Two ways to invest
• Physical form
• Paper
• Physical Gold includes Coins,Bars, Jewellery etc.
• Paper Gold involves future contracts and ETFs.
• Its easy liquidity makes it a smart investment
  option though ETFs future contracts have lower
  premiums making it risky for beginners.

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Gold Premium

• Gold Premium embodies two things.
• Spot Price
• It refers to the current market price with which
  an asset is bought and sold
• Calculated as per recent average bid price
• Bid price is provided by professional traders
• Premium Price
• Added cost on the top of Spot Price
• Includes topics like minting, transport, storage
  etc.,
• Their charges vary from one dealer to other.

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3.Fixed Deposits

• A Financial Instrument offered by Banks
  Non-banking financial companies where you earn
  higher interest than a savings account for the
  money you deposit.
• You will earn money in the form of interest.
• You can withdraw whole money once it completes
  its Maturity period.
• If you want to withdraw before its maturity, you
  need to pay some penalty.
• This is a very low risk option when compared with
  others.

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Advantages of Fixed Deposits

• High assurance of returns to the investors
• Market fluctuations will not affect Fixed
  deposits
• Higher interest rate is expected with great safety

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4.Real Estate

• Real Estate investment is one of the oldest form
  of investments.
• It is defined as The property consisting of land
  and the buildings on it, along with natural
  resources such as crops, minerals or water,
  immovable property of this nature etc.
• Broadly it is classified into 4 types.They are
• Commercial real estate
• Residential real estate
• Industrial real estate
• Land (vacant land,farms etc.) real estate

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Real Estate Benefits

• Investment in Real Estate provides you a lot of
  benefits. Some of them are
• Steady Income
• Long-term Financial security
• Hedge against Inflation
• Wealth Creation
• High tangible asset value
• Portfolio Diversification
• Competitive risk adjusted returns
• Demand increases the value
• Low volatility with good returns

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5.Bonds

• These are the instruments where you lend your
  money to the government or a company and in
  return they will pay you the capital along with
  some interest.
• Investing in bonds is a good option if steady
  income is your goal.
• These provide better interest rates than
  deposits.
• Unlike deposits,you can sell the bond even before
  the maturity.
• These are more liquid and volatile.

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Conclusion

• Always keep in mind that, not only these, every
  Investment option is associated with some risk.
  Infact, Investment itself is associated with
  risk. You need to gain good knowledge before
  investing in anything by thorough research and
  continuous analysis.
• Make right decisions and enjoy the fruits of
  investment.
• Happy Inveting!!

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