Avenues for Investments

There are various avenues available for investments with different risk and return profile. The choice of investment avenues depends on your financial goals, risk tolerance level, investment horizon, and overall financial situation.

Understanding Investment Asset Classes

• Shares: Shares represent ownership in a company. When you buy shares of a company, you become a shareholder, and your returns depend on the company's performance. Shares have the potential for significant capital appreciation but also come with higher risk and volatility on account of company specific risk, economic conditions etc.
• Bonds: Bonds are debt securities issued by company, governments, or municipalities to raise capital (funds for business). When you buy a bond, you are essentially lending money to the issuer in exchange for periodic interest payments (coupon) and the return of the principal at maturity. Bonds carry certain risk, particularly related to interest rate fluctuations and credit risk of the issuer.
• Mutual Funds: Mutual funds pool money from multiple investors to invest in a diversified portfolio of stocks, bonds, or other securities. Mutual funds offer diversification and are suitable for investors who lack the skills to invest directly into the capital markets and therefore entrust their savings to professional fund managers to invest for them in return for a small fee.
• Exchange-Traded Funds (ETFs): ETFs are similar to mutual funds but are passive funds that invest in securities of an index. They provide diversification and liquidity and are often more cost-effective than traditional mutual funds.
• Real Estate: Investing in real estate involves buying properties for rental income or capital appreciation. Real estate can provide a source of passive income. However, real estate investments have varying levels of risk depending on the type of property, location, and market conditions and lacks liquidity.
• Precious Metals: Precious metals like gold, silver often used as a store of value and a hedge against economic uncertainties and inflation. Investing in precious metals can be done through physical ownership or through exchange-traded funds (ETFs). The prices of precious metals can be influenced by economic, geopolitical, and supply-demand factors.