In today’s market there are a number of investment opportunities and instruments available for an investor to invest depending upon his taste and financial goals. Many financial institutions offer multiple products and a full range of active and passive investment styles and strategies, designed to meet needs of an investor be it traditional or alternative forms of investment. Regardless of the investor’s profile or time horizon there is something in accordance to the needs of the investor available in the market. The key is to research and find the right solution for your investment challenges. Depending upon the needs and requirements of a person, he can also split his investment between financial instruments like stocks and bonds and non-financial instruments like gold and real estate. There are instruments that may primarily focus on savings whereas there are also instruments that may primarily focus on returns. A potential investor has to choose accordingly. Mentioned below are the major investment instruments or opportunities available in the markets today:
Equity Market: Investing in the equity market or the stock markets is one of the most preferred investment instruments. One can invest in the stock market with the help of a stockbroker: Another option is to invest in the financial markets with the help of a financial intermediary which will also be able to advise you. Banks and brokers can not only place your stock exchange orders but also advise you in the choice of your investments. You can also be an independent investor; you can do your own research by reading the newspaper, annual reports, company documents, financial books and websites and following other media options. You then choose the funds or shares you want to buy. You can then use the services of a discount brokerage house or an online broker to place orders. Whether one opts for seeking professional help or prefer to invest alone, one will need to determine your goals, a preliminary step in establishing an investment plan. The way individuals choose their investments depends on their income, goals, age, personality and other factors. Bonds: Financial Bonds are generally issued by the government or other financial institutions. The major advantage of bonds over investing in the equity market is management of risk. Bonds are considered less risky proposition than stocks. They provide conservative yet stable returns and are backed by guarantees. Bonds are generally debt instruments, so when you purchase a bond you are in fact loaning your money. The value of bonds can also increase or decrease mostly depending upon prevailing interest rates. An investor can buy a bond depending upon various ratings and creditworthiness of the individual bond. Bonds with a first-class rating have a lower yield than those with a poor rating. Mutual Funds: Mutual Funds are another very popular investment instrument. Mutual Funds are basically a collective investment in transferable securities, the purpose of which is to collect the savings of individuals and to place the collected funds in transferable securities (stocks, bonds, debt securities). By purchasing Mutual Fund Units, the investor becomes the owner of a portion of a portfolio of securities. These units may be redeemed at any time upon simple request of the subscriber; there is therefore a subscription price and a redemption price with possible costs. Although some mutual funds can be used to achieve short-term savings goals, mutual funds are more appropriate for long-term investment. This is because their value fluctuates with the value of the investment securities they hold and the returns are not guaranteed. Short-term fluctuations can be significant, but the long-term return of mutual funds has been higher in the past than that of guaranteed interest products. There are many banks and financial institutions that offer their mutual funds to potential investor. An investor should first study them and then decide on which fund to choose. You can also approach an organisation which offers such investment services, like services from Upwardly simplifies financial products and helps deliver better investment returns for individuals.
Alternative investments Opportunities: There are other financial and non-financial investment instruments available in the market where you can park your funds. Depending upon the risk you are willing to shoulder, the returns can be worked out accordingly. There are low risks low return opportunities such as fixed deposit schemes, recurring deposit schemes and more. Then there are medium risks modest returns options such as gold and more. Then there are high risk and high return options such as investment in real estate market and private equity.