Everyone's Guide to Smart Investing

Investment is a financial term, broadly implying the channelization of money to earn profit. With shaky economies, some irrational business decisions at macro level, and uncertain job markets, investing well slips into the block of present day life's necessities for a common man. You can invest in one or more of the key instruments given below. Please note that each channel has some advantages and disadvantages. Therefore, it's better to go for a wide spread and invest in diversified tools. In addition, make sure you read and fully understand all the investment documents & the associated legalities. Here are your main options:

• Real Estate: One of the high yield investment method, property is easy to understand and execute. Because of this, it is most popular among people of all economic levels. As a standard, land yields more returns than a built-up property. Real estate investment usually requires a huge capital and a relatively long timeframe for yielding profit. But, whatever time it takes, the returns are almost assured and are multiplied. Just make sure the documents are all genuine and legally correct.


• Stocks: With the pitching of employee class into stock investing, it is one of the fastest growing sectors. Futures, options, and equities are the key category here. As a standard, you buy stocks when it's bearish (at a low rate), but is likely to go bullish (high rate) in the near or mid-term. You sell and reap profit when those shares go bullish. However, the market may or may not behave the way we expect. In fact, stock market sentiments are said to be highly irrational and this makes it a risky bet. Still, since the capital requirement is low, shares are popular. Low to medium level investment is ideal for salaried people as well as the business class. Proper understanding or professional help and constant tracking of the market can be helpful in wise investment or disinvestment to reap profits or to avoid/minimize losses. The timing of transaction is very important here as the stock prices move through the stock exchange timing.


• Insurance: Life insurance and medical & accidental insurance are yet another way of 'safe' investing. Actually, they are tools for preventing financial losses, or for providing the saved money at the most needed times. If not offered by the employer, then one must have these insurances done to financially cover up for the health related exigencies. People, who cannot afford financial stakes elsewhere, should go for insurance policies for retirement, children's education, etc.


• Gold: This has always been the safest of 'long term' investment tool. It almost never sinks your money. At the most, you won't reap profit, but then you are also not likely to incur loss. Interestingly, largely, the economic slowdown triggered the rise of gold prices. People from all over the world are investing in gold and expect moderate profit in the next few years down the line. Gold is a safe and affordable place to lock money even for the economically weak people.


• Mutual Funds: These are more like hedged investment. Several investors' money is used to buy different securities, forming a portfolio. The holdings are so chosen that the losses are none or only minimal. Accordingly, the returns are also moderate. It is better to go for professionally managed fund rather than building your own portfolio without an in-depth understanding of stocks fluctuations. Avoid investing too much money in mutual funds, as the scope of returns drops in any economic or financial disturbance. The other tools are sturdier than these funds.

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