Tuesday, January 25, 2011

Type of Investments

Once you make your decision to save some money from your monthly expenses, your first challenge is how to keep that money saved for longer period of time and keep it going up over time.  For that you need to plan your investment strategy. Before drafting any plans for your investment, you need to be aware of types of investments available there.
Life Insurance: Life Insurance policies are kind of investment which is very popular. It is a way to ensure income for your family when you die. It allows you a sense of security and provides a valuable tax deduction. There are many insurance companies which provide wealth and insurance in same plan. But read the offer documents very carefully.  
Stocks: Stocks are a unique kind of investment because they allow you to take partial ownership in a company. Because of this, the returns are potentially bigger. There are certain risks as Share Markets are usually volatile; but consult some experts first before investing and you should be fine most of the time.
Bonds: A bond is basically a promise note from the government or a private company. You agree to give them a set amount of money as a loan and they keep it for a set number of years with a predetermined amount of interest. This is typically a safe bet and one that is a good investment for a first time investor because there is little risk of losing your money.
Fixed Deposits: FD’s as they are called. This is safest option for anyone. In this you keep your money in bank for certain amount of time period and will be paid interest on it. The interest will be lot better than the saving bank account interest.
Mutual Funds: Mutual funds are a kind of investment that are based on the gains and losses of a shareholder. Basically one institution manages the money of several or many investors and invests in a list of various stocks to lessen the effect of any losses that may occur.
Real Estate: If you have real big money and can invest in one go then Real Estate is very good option. Returns from this investment can be huge.
GOLD: In India, investing in gold is traditional options. Indians are investing in gold for ages. It’s very lucrative option.

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