Investment avenues for returns in India

An increasing number of individuals across the country are starting to invest their money in financial instruments with the hope that their money will grow over a period of time. If you would also like to invest in products that can enhance your wealth, there are a few important points to consider.

First things first, you will have to ascertain whether or not you have enough funds for the present. While it is important to save for the future, your present must be secure before you can start thinking forward. Make sure that you make the right amount of sacrifices and don’t compromise too much of your present in the hope that you will have a great future.

The next most important thing to consider would be emergency money. Since most investment instruments are granted against lock-in periods, the funds invested cannot be withdrawn until the completion of said period. Before making any investments, it is advised that investors set aside some funds as emergency money as it can come in handy in times of unforeseen emergencies like medical or other expenses.

Clearing off your debts is another important step to take before making investments. Unless you are totally free of debt, making investments can be a risky endeavour. Having debts will make it harder for you to manage your investments, making it essential to clear off all credit card dues and loans before putting your money into an investment instrument.

In case you have no debts to your name and have also managed to set aside funds for emergency purposes, you are set to invest. Here are some of the options you can consider to derive high returns on investment.

Stock Markets

Investing in the stock market means that you can contribute to any company’s capital provided it is listed on the stock exchange. A company’s equity can be purchased by buying their shares, and the price of said shares will rise or decline depending upon the company’s financial performance. Investors are in for profits if the company from which the equity was purchased also makes profits.

The most important thing to remember when investing in the stock market is that good returns are possible only if the investor is extra careful when choosing the stock in which he / she wishes to invest. Stocks that come with low beta value are a better bet as the rise or decline in stock prices will depend upon how the market fluctuates.

Mutual Funds

Investing in mutual funds means that your funds will be put into a group of investment options, primarily bonds and equities. Since your investments are diversified when invested into mutual funds, it is considered a much safer option in comparison with investing in individual shares in the stock market. Another great factor about investing in mutual funds is that the funds are managed by well-trained and skilled banking professionals who are in a better position to handle investment portfolios than regular investors.

Initial Public Offerings

IPOs are undertakings by companies that wish to sell its shares to the general public. When an Initial Public Offering happens, the prices are usually low. In case the performance of the company has been up to par, the investor will have a better chance to make profits. IPOs are among the most preferred investment options in India as it offers returns in excess of 60% per year.

Systematic Investment Plans

SIPs are easy and smart options that require individuals to invest a particular pre-determined sum of money on a regular basis. The mode of payment (quarterly / monthly / weekly) can be chosen by the investor based on his / her convenience and preference. The amount chosen will be debited automatically from the investor’s linked account and put into a certain mutual fund scheme. With each debit of the account, extra units of the scheme will be purchased and added to the investor’s mutual fund account. SIPs are considered as the ideal savings instruments as they not only deliver healthy returns, but also play their part in helping investors inculcate the habit of savings.

Real Estate

Last but not least, real estate is also a good area to invest in. The returns on investment offered by real estate is higher than any other sector. If you have the funds to make large investments in real estate, a little patience is all you need as the value of the land or property will increase to a significant extent over a period of time.