2020 is almost here. It’s the beginning of a new time, and with so much going on in the world its time that you rethink your investment options and keep up with the changes in the market. Let’s have a quick look at the five best investment options to invest in 2020.
Mutual Funds
A mutual fund accepts funds from investors who in exchange receive mutual fund shares. In turn, the mutual funds invest those funds in a portfolio of financial instruments. The mutual fund shares represent an equity interest in the portfolio of financial instruments and the financial instruments are the assets of the mutual fund. Investors with a small sum to invest would find it difficult to achieve the same degree of diversification because of their lack of sufficient funds to buy shares of a large number of companies. Diversification of funds reduces the risk that comes with investing in mutual funds. Investors in mutual funds have access to their funds on a daily basis. Mutual fund investors enjoy a transparent investment strategy, and, therefore, know the risks taken by the funds’ managers. There are always actively managed mutual funds that outperform their benchmark for a period of time. These are considered to be one of the best avenues for investment in our country. Amongst mutual funds, equity mutual funds are in particular top-rated.
Real Estate
Real estate includes office buildings, apartment complexes, shopping centers, warehouses, industrial parks, hotels, motels, resorts, and so on. It’s where businesses are conducted and where many people live together. Real estate is also a means of building long-lasting wealth for the investor. To us, long-lasting wealth is an investment that pays you every month. It’s also one in which the value increases every year. Real estate investing is a great way to generate wealth. Properties are usually bigger and more valuable than other types of real estate, such as houses. Even though residential properties are a big part of real estate investing, other types of properties make for excellent investment opportunities as well. For instance, offices and warehouses, retail centers, and even undeveloped land. The downside of investing in real estate is that it does take some time to get up to speed. The neat thing with it is that there are so many different ways to structure your profit in a transaction that you can often give the seller exactly what she wants and still make a healthy and significant profit for yourself.
Stock Market
Stocks are really bonds or paper issued with a fixed rate of interest, as opposed to the dividends on shares, which vary with the fortunes of the business. However, in loose conversation stocks refer to shares. Common stock and partnership shares are examples of equity instruments. Because common stock represents ownership of the corporation, and because the corporation has a perpetual life, common stock is perpetual security; it has no maturity. Preferred stock also represents an ownership interest in a corporation and can either have a redemption date or be perpetual. The cash flows for a share of common stock consist of the dividend payments and the projected stock price when the stock is eventually sold. As you can see, neither dividends nor the stock price when the stock is to be sold is known with certainty. This is what makes common stock valuation difficult. Investors who buy and sell securities on the secondary markets may obtain the services of stockbrokers, individuals who buy or sell securities for their clients. Market makers derive a profit from the spread and the turnover of their stocks.
Gold:
Gold is one of the most preferred investments in India, without any doubt. Its capacity for high liquidity and enduring inflation make it a very popular and safe investment option. It is true that markets witness fall in gold prices every now and then but such falls never last and gold always maintains its value. Investing in gold is gives you the kind of safety that mutual funds rarely offer, and profits made by selling gold when its rates are high can be huge. It has been seen that gold shares an inverse relationship with equity investments because when the equity markets start performing poorly, gold investors make huge profits. When pooling your money into gold, the safety and security of physically protecting the gold can be risky and cumbersome so you must check the BSI hallmark before buying gold. Small bars and coins are always in huge demand. Another way to invest in gild is going for Internet Investment Gold in which you can physically buy gold online, get it stored in professional safety vaults and use it whenever you need it.
Public Provident Fund:
PPF is a very popular investment vehicle in India because its long tenure of 15 years has a compounding effect and earns the investor huge tax-free interest especially in the later years of the scheme. This interest and the safety of the principal amount are guaranteed to be safe which makes this option all the safer and better than other such options that promise good profits. Any common man can go for PPF investment because it does not come with any risks. You do not need a lot of knowledge for investing in PPFs. You can easily open a bank account, or get an account in the post office, and invest in PPF for a tenure of 15 years. It works similar to your Recurring Deposits (RD) and you also have the option to extend the tenure of PPF further by five years. It is easy to avail your money and make an early withdrawal after the 7th year, in case you need your funds. Also, the interest that you earn on PPF is free from taxation.
Now that you know some great investment options, you must think about your investment capacity, odds of investing in different options, and calculate your returns in the long term. It is advisable that you invest your money to ensure security for your life, and for your family. A good investor thinks, evaluates and then takes an investment decision. Most investors are short term or do not have the patience to hold on for the long run to benefit from their investments. When pooling huge amounts, you do have chances of making huge profits too, but, you should be fundamentally strong and cash-rich to withstand tough times in case everything does not go as planned. This is why safe investments like gold and real estate are sometimes preferred over mutual funds. But it depends from person to person, their knowledge and expertise how they derive the best results out of their investments.