Well the important question to ask now is “Where should i invest?”
One has a lot of options to choose from Post Office Savings Scheme, Fixed Deposits, Stocks, etc. There are Plenty of Products which could be classified as:-
- Equity:- Means Taking share into a business. You can buy Equity through Direct Stocks or Equity Mutual Funds.
- Debt:- “Debt” means “TO LEND”. Investing in debt means you are lending your money to someone. Examples are:- Fixed Deposits, PPF, Bonds, Post Office Savings Schemes, Debt Mutual Funds.
- Real Estate: One can either invest in a Piece of Land or a Built up House or Flat.
- Gold: Gold can be invested by buying gold in physical form/ buying Gold ETF’s (exchange traded funds) or also by investing in Gold Funds (which invest in Gold Mining stocks)
- Art: Art has also become a important asset class.
- Alternate Products:- We are currently witnessing emergence of new complicated products such as Structured Notes, Private Equity Funds, etc.
Does this look simple?………One having 100 rupees can divide 20 rupees in each Asset class and works over. I wish that it was that easy.
Lets catch up next time and understand how does one go about choosing the right asset mix.
Well you looked over couple of basic investment options that are more recognized commonly. To name a few – Bank deposits (CDs and savings accounts), Life Insurance Policies, Post Office savings deposits, Indira Vikas Patras etc. (not sure if that are still in vogue). It would be nice to see a more comprehensive investment list. Also I am not sure if your intended audience is Indian or International. If international then it is a very different playing field. Here in US we have IRAs, 401s, etc.
Just some food for thought… nice post though..
Comment by Praveen — July 1, 2008 @ 8:28 pm |
Nicely articulated.
I as an investor as well as an advisor would like to post a thought that why do we need to invest and if i can understand the need to invest waht all assets i must go for and what assets i can go for. Mark it, Must and Can are important decision makers.
E.g. a 28 year old chap meets a financial advisor and asks for investments with a small corpus of let’s say Rs.1 Lac.
Now if this chap has a liability towards his dependent family the most important thing for him is to get an appropriate Life cover and than other options of investment comes into picture.
It’s all about advisory vs sales.
Do we have right advisors who actually design a portfolio?
Mg
Comment by Mohit — July 2, 2008 @ 1:37 am |
With multitude of options and plans for investments being offered by the financial sector. It now needs an informed person to study each offering,check the fine print,calculate and compare with options avaiable to reach some definitive implementable deduction for good investment oppurtunity.
I agree with Mohit, its a catch 22 situation where Advisory and sales are concerned.
Hope to see some good Advise on options avaiable as we go along.Keep it up.
Perhar
Comment by Col Perhar — July 2, 2008 @ 5:07 pm |
Well lets first answer your question Col. Perhar.
Understanding investments is not as tough as it looks. We all want the best advice for our investments but nobody wants to know how to get the same.
Recently i met a client who was arguing that with the quantum he had he can get best equity advice. This client had 2 crore rupees and said that he would get his Portfolio managed from one of the bigger equity Brokers. But to his utter surprise this broker refused to handle a small portfolio (as per broker).
“THE INFORMATION YOU GET IS NOT THE INFORMATION YOU WANT. THE INFORMATION YOU WANT IS NOT THE INFORMATION YOU DESERVE. THE INFORMATION YOU DESERVE IS NOT THE INFORMATION YOU CAN AFFORD. THE INFORMATION YOU CAN AFFORD IS THE INFORMATION YOU ARE MISSING”
The above lines are self expanatory.
Comment by steps2wealth — July 4, 2008 @ 8:27 pm |