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Investments,Where shall I invest,Risk analysis




Investment is a process of buying an asset and to reap the benefit of that in future. Asset can be anything (even knowledge, skill, asset etc). In monetary concept we are buying some asset using the money. We work hard and earn money in our good young day’s and reap the investment (which we made during our young days) benefits in ill time. In short we make investment in our good or bad time when we are able to do so and our investment will earn for us when we are in need of it.
.Then comes the big question why should I invest? Rather than keeping money with myself and can use it in future when it is needed. The answer for this question is inflation (Percentage of increasing price of goods and services in future with respect to current price). Hence our money will get devalued as inflation grows. For eg:- If I bought 1 kg of rice for Rs20 and rate of inflation is 5% then the cost of same rise will be Rs 25 after five years. A 25% increase so your Rs 1000,00 have only a buying power of Rs 75,000 after 5 years. Here comes the importance of investment and the rate of return from investment should have to be above the inflation rate to protect our hard earned money.
Once when you get answer for the question purpose of investment there arises another question where shall I invest? You can invest in any of the assets which will fetch earnings above the inflation rate. In this era of globalization a range investment avenues like currencies, complex derivative products etc. are open for investors, but still the traditional investment avenues like Bank FDs, Bonds, Equity shares, Gold, Real estate etc. are having an edge. Some other investment options are art, precious metals other than gold, ETFs etc re also open to common man.
.Now when we know where to invest there arises another question which investment avenue is suitable for me to invest? The answer to this question is tricky one, it depends upon a lot of factors like age, risk taking capacity, income and finally your expenses. In a generic we can suggest that the combination of various investment avenues is the best to averse risk. The percentage of allocation in each investment products again will depend on the above mentioned parameters. But it will be always best to have more exposure in risky investment avenues like equities market at your younger age when comparatively the income is more than expense.
In short it is always better to start investing early and wisely for a healthy wealth condition.

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