8 Best Investments For Any Age Or Income

“If you don’t find a way to make money while you sleep, you will work until you die.” – Warren Buffet. And what’s a better way to make your money work than investing it? Most would argue that investing is easier said than done, especially when the market is flooded with hundreds of investment options. A large section of people falters when it comes to selecting routes matching their investment intent. The first cue that one must follow is to weigh in their age, present obligations, and investment horizon before deciding. For instance, if you are young and do not have any significant financial commitments, investment plans with a high risk-reward quotient may suit you more than conservative investors or those nearing retirement. On that note, let us quickly take a look at some of the best options in India.

Top 8 Investment Instruments For You!

These are among the top instruments of investment in India for every age and income group –

• Stocks

Stocks or securities represent a share of ownership in a company. Investing in shares accompanies high risk and reward as a stocks’ performance depends entirely on the company. This makes stocks one of the riskiest investment avenues in India. Generally, individuals with solid market knowledge and high-risk tolerance prefer investing in stocks.

• Equity Mutual Funds

Ardent believers of “Don’t put all your eggs in one basket.” may find equity mutual funds more suitable and a safer investment choice. Typically, equity funds invest at least 65% in equities and involve high risk and reward quotients.  Based on your investment objective and risk profile, you can invest in any of these equity funds – small-cap, mid-cap, large-cap, ELSS, etc. 

• Debt Mutual Funds

If capital preservation is your primary goal, debt funds should be a good choice. These funds invest a significant part (at least 65%) of their assets in debt instruments. They provide stable returns and expose an investor to low to moderate risks.  Liquid funds, gilt funds, overnight funds, ultra-short duration funds, and fixed maturity plans are some popular examples of this investment option.

• Hybrid Funds

Love the idea of getting the best of both worlds, i.e. low risk and high returns? You can check out hybrid funds that follow 60:40 asset allocation to debt and stocks based on your investment goal and risk appetite. Conservative funds, balanced funds, arbitrage funds are some standard picks in this category of funds. 

• Government Bonds

They are debt-based investment options where you will be lending money to the government in exchange for a fixed income paid on maturity. The government relies on such bonds to raise capital. Sovereign-backed, these bonds come with a low-risk quotient.

• Certificate Of Deposits (CD)

It is a savings account where investors invest a fixed sum of money for a specific period. In exchange, issuers pay interest to investors. On redemption, investors receive the invested sum of money along with the interest income it accrues.

• Fixed Deposits

Investors with a conservative outlook towards investment plans may find fixed deposit schemes a viable option. FD schemes help generate higher returns than a savings account but associate zero market risks. These require investors to park a lump sum amount in the FD account for a specific period, which accrues interest. These schemes come with a maturity period and may allow premature withdrawal on certain conditions. 

• Alternative Investment Options

If stocks, bonds, or bank deposits don’t pique your interest, you may look into alternative means of investing like invoice financing. As invoice financing is gaining popularity in the business community, the demand for investors is high, and so is their growth scope.  Typically, investing in a company invoice is a short-term endeavour that may stretch up to 90 days and be an effective means of diversifying your portfolio. These invoices are pre-vetted and drawn primarily against large corporates. Thus, investors are exposed to minimal risks. Furthermore, this option offers high returns in the short-term, ranging from 12% to 20%.

Bottom Line

Investments can turn out to be quicksand for those who don’t have a proper grasp of its fundamentals. So, to navigate through the highs and lows of it, gain an insight into things like your investment goal, risk-taking capability, and time horizon.  Above all, make sure to dedicate substantial time towards studying the market, trends, and factors that influence its movement. As Benjamin Franklin said, “An investment in knowledge pays the best interest.” So, put your knowledge to the test and pick investment options that suit your profile the most.