Investing is nothing but saving money for the betterment of your future. For some people investments are also a form of generating income or gaining some extra pocket money. When it comes to investing one has a variety of options available to choose from, but for this having a basic understanding of how investments work and how much risk does each one of them carry is very important. Also questions such as how to invest in stocks? Difference between stocks and mutual funds? Which investment is better long term or short term ? all these need to be answered and understood deeply. The basic goal of investing is to put your money in different investment vehicles based on their returns and risk analysis and then hope for your money to grow. Investing for beginners can be very intimidating because of all the challenges and possibilities in the market, hence here are a few basic options that one should keep in mind as a beginner before investing.
Stocks : Stocks can be broadly distinguished in two categories, i.e Stocks owned by public sector companies and stocks owned by private sector companies. Anyone who buys stocks of a particular company becomes the fractional owner. People who own these stocks are known as shareholders. The kind of stocks you buy depends upon the risk you want to take, Eg: For blue chip stalks the risk is comparatively low whereas for growth stalks the risk is slighter higher. Stocks have proven to be one of the effective investment vehicles to grow money.
Bonds : When you buy a bond, you hold a share of an entity’s debt in exchange for interest income at periodic intervals and the return of the principal amount when it matures. You can also trade bonds like stocks when you stop receiving interest.
Funds : We have often heard of the term Mutual fund, but what is exactly mutual funds? When you decide to invest in mutual funds you’re giving the control in the hands of the investment managers. These managers help the investors to invest in stocks, bonds, preferred shares, commodities etc. SIP (Systematic Investment Plan) is a mutual fund tool through which you can invest in small manageable amounts over a period of time. This can prove to be helpful for beginners as they have to invest a lump sum amount of money at the beginning itself. Eg. Scripbox is one of the best mutual fund app because it’s one of India’s trusted investment platforms.
Here were a few basic investment options that can be used by beginners to enter the world of investing. If you still feel that you are not confident enough to begin, you can always choose to take help of online brokers or can also rely on apps that provide investment solutions like Scripbox.