Financial Instruments

Equities

Equities (in simple words or in day to day language we call it stocks of company) are a type of security that represents the ownership in a company, it means if you are holding some equities of any company than you are the part owner of that particular company.
Equities are traded (bought and sold) in stock markets. Alternatively, they can be purchased via the Initial Public Offering (IPO) route also, i.e. directly from the company.
Investing in equities is a good long-term investment option as the returns on equities over a long time horizon are generally higher than most other investment avenues off-course that company performances must be well for best returns in log term. However, along with the possibility of greater returns comes with greater risk.

Mutual funds

Mutual Fund is a fund based on particular theme and managed by professional fund mangers, there are many mutual fund themes are there available in markets for example : Tax Saver or ELSS, Dividend or growth, Mid-cap or Large-cap and even Small-cap funds, blue chip, pharma, diversified, PSU and many such themes mutual funds are available for investors to invest in. A mutual fund allows a group of people to pool their money together so that a professional fund manager can manage that fund. This investments is popular because of its cost, risk-diversification, professional management & strict regulations. Investor can invest as little as Rs.1,000 in a mutual fund of his / her choice.Investor also have the option to try Systematic Investment Planing route popularly known as "SIP" to invest in Mutual funds. Investors must check the fund's past track records and returns before investing in there chosen fund.

Bonds

Please do not confuse these "Bonds" with "James Bond 007", hahahah. Anyways lets get back to the serious topic. Bonds are fixed income instruments which are issued for the purpose of raising capital. Private entities, such as companies, financial institutions, and the central or state government and other government institutions use this instrument as a means of garnering funds. Bonds issued by the Governments to carry the lowest level of risk but could deliver fair returns.

Deposits

Investing in bank like Fixed Deposits or post-office deposits is a very common way of securing surplus funds. These instruments are at the low end of the risk-return spectrum, Post office deposits earn one of the lowest interest rates in financial markets, but it also considers one of the safest bet as per Indian government rules.

Cash equivalents

These are relatively safe and highly liquid investment options. Treasury bills and money market funds are cash equivalents.

Non-financial Instruments

Real estate

With the increasing cost of land, real estate has come up as a profitable investment proposition. But one must keeps at-least 7 to 15 years view for best returns from the real estate.

Gold

This precious yellow metal is a preferred investment option, particularly when markets are volatile and in uncertainty like war situations. India is one of the highest consumer of Gold not in terms of investments but in terms of physical purchasing of it, as India is traditionally a Gold purchaser it is in our culture, tradition and also religion. Beyond physical gold, these days a number of products which derive their value from the price of gold are available for investment on commodity and stock exchanges like gold futures and gold exchange traded fund.

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