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COMPARISION OF VARIOUS INVESTMENT ALTERNATIVES
CONTENTS
• Objectives
• Definition of investment
• Objective of an investor
• Investment alternatives
1. Financial assets
2. Real assets
• How do investors invest?
• Most preferred investment option
OBJECTIVESOBJECTIVES
• To understand in depth about different investment avenues available
in India.
• To find out how investors get information about the various
financial instruments.
• The type of financial instruments, they would prefer to invest.
• The rate of return they would likely to earn from the investment.
• The risks involved in various investments
INVESTMENT• Investment refers to putting money into something with the
expectation of profit. • The future benefits derived from an investment are known as
‘returns’1. Giving loan: with an expectation to get the principal back
along with the interest at a future date2. Buying gold: with an expectation of appreciation in its value in
future3. Buying an insurance plan: for various benefits derivable in
future &/or in case of an eventuality4. Buying shares of companies: for dividend &/ or capital
appreciation.
Objectives of an investor
• Maximization of return
• Minimization of risk
INVESTMENT ALTERNATIVES
• FINANCIAL ASSETS
– Bank Fixed deposits
– Insurance policies
– National Saving Certificate (NSC)
– Public Provident Fund (PPF)
– Stock Market
– Mutual Funds
– Private Equity
– Non Resident Ordinary (NRO) funds
• REAL ASSETS– Real estate– Precious objects
The three golden rules for all investors are:• Invest early• Invest regularly• Invest for long term and not short term
FINANCIAL ASSETS
• Bank Fixed Deposits (FD)Fixed Deposit or FD accrues 8.5% of yearly profits, depending on the bank's tenure and guidelines, which makes it's widely sought after safe and secure investment alternative.
• Insurance
It involves pooling funds from many insured entities to pay for the losses that some may incur. The insured entities are therefore protected from risk for a fee, with the fee being dependent upon the frequency and severity of the event occurring.
• National Saving Certificate (NSC)
It is subsidized and supported by government of India as is a secure investment technique with a lock in tenure of 6 years. There is no utmost limit in this investment option while the lowest amount is estimated as Rs 100.
• Public Provident Fund (PPF)Like NSC, Public Provident Fund (PPF) is also supported by the Indian government. An investment of minimum Rs 500 and maximum Rs 70, 000 is required to be deposited in a fiscal year.
• Investments in Stock MarketInvesting in share market yields higher profits. stock market to some extent cannot be considered as the safest investment options..
• Mutual funds: It is a type of collective investment scheme that
pools money from many investors and invests typically in investment securities (stocks, bonds, short-term money market instruments, other mutual funds, other securities, and/or commodities such as precious metals)
REAL ASSETS• Real estate investment
involves the commitment of funds to property with an aim to generate income through rental or lease and to achieve capital appreciation.
• Art as an investment avenue has been considered an interesting and profitable alternative, but it is also extremely risky.
GOLD INVESTMENT
• Of all the precious metals, gold is the most popular as an investment. Investors generally buy gold as a hedge or safe haven against any economic, political, social, or fiat currency crises
OTHER INVESTMENT ALTERNATIVES
• Company fixed deposits
• Bonds and Debentures
• Derivatives
• Commodities Market
number of people friend's suggestion
newspapers/magazines
self decision
television
brokers/agents
others
Thank you