What is the most profitable way to secure your investments for the future? It is understandable for risk-averse investors to stick to fixed income securities. Yet, it would be equally beneficial for risk-takers to secure a part of their portfolio of investments in long-term fixed deposits. Any investment should take into consideration the effects of an economic downturn or upswing. In both economic eventualities, the portfolio should reap the maximum benefits for the investor.
Why should I invest at all?
Investment gurus are perhaps the best starting point for assessing the investment environment. Consider your own judgments before you proceed with locking in your funds with any investment option. Yet, risk lies at the heart of any investment. Apprehensions exist before securing your money for returns in any investment. Yet, one can forego these apprehensions in the face of rising inflationary trends where it makes sense to invest in mutual funds or government bonds.
What should make you smile when you look at your portfolio?
Most investment gurus suggest balancing your portfolio with the right mix of investments. High rates of return can be reaped with risky investments and non-risky ones. Here’s a look at what your portfolio should contain in order to achieve the right balance:
- High returns and high risk investments: Investments options that are linked to the stock market are considered highly volatile yet generate high returns for the investor. Mahindra Finance helps Invest in mutual funds to reap the benefits during a well-performing economy. Most investment advisors consider mutual funds as a good investment for the long term. Mutual funds also perform better than fixed deposits in rising inflationary trends.
- Low risk and low returns: Government bonds and fixed deposits in India may be low-yielding, yet are assured returns. Don’t fret to invest in these investments in a volatile economic scenario. When the returns vary in mutual funds, they will not vary in your deposits. A consistent high interest over a period of time may help you secure you financially for your retirement.
Can one compare these investments?
One can say that mutual funds, particularly debt funds perform better than fixed deposit schemes. Due to the volatile market situation, increasing interest rates make these funds more attractive. Yet, the financial security of fixed income securities makes them more attractive for maximum investors who are risk-averse. Use the fixed deposit calculator from Mahindra Finance that gives an idea of the accrued returns based on the interest rate at the end of investment period or lock-in period. Choose your investment amount based on the fixed deposit rates in India and the term of the investment.
Can one leverage investment options in any emergency?
Both mutual funds and fixed deposit can be liquidated with ease. One can easily liquidate a mutual fund at the prevailing NAV. Despite the long lock-in periods with banks, one can liquidate these assets with a small penalty.
High returns can be assured with the rising interest rate in banks for their fixed deposits. Although based on market volatility, mutual funds, no doubt secure the highest returns immediately. The best of both investment options can create the right balance for your portfolio.