Why do people invest? Maybe they are in need of financial security. What is the best way to attain financial security? It’s to save and invest money for a long period of time to have a financial stability in future. According to the typical thinking of most of the people, if you need more money you need to work more. But is that bunch of money going to be pleasurable if you don’t have the time to enjoy it? You can’t have a clone of yours to work every time for you so the expansion of money leads to an extension of your working hours. Investment is to make your money work for you, maximizing your earning potential to know more about the best investment options in 2017.
Two ways by which your money can work for you are:
1. Money earns Money: You can give money to someone to use it for a pre-defined period of time. That money will come back with an interest. Or you can also invest in stocks.
2. Buying something that could increase in value: You are an owner of something for which you hope that its value will increase with time. At the time of need, you can sell it and get the money along with the profit.
There are a various short term and long term investments option available in the market in 2017 like mutual funds, bank fixed deposits, equity shares, stocks and much more. One can opt for the most appropriate investment option as per his needs, budget and future plans.
Risks and Returns are the two terms that click in your mind instantly whenever you hear about Investment. All the three terms- Investment, Risks and Returns are interlinked and interdependent. High investment leads to more risk which further leads to higher returns.
Some people think that ‘Investing is Gambling’. But these two terms are quite different. One should not get confused with both. Gambling is putting money at risk by betting on an outcome which is uncertain. It works just on a hope that you might win the money. But investing doesn’t work on this principle. Yes, there is a risk but there is also a security of getting a certain amount of money after a defined time interval.
Timeframe, Tolerance, Diversification, and Knowledge, these are the four strategies which can reduce your exposure to investment risk. You should stay invested for longer in that product with which you feel comfortable. Don't get stuck to any one type of investment option and put efforts to understand the financial world to become a good investor.
TO BE CONTINUED......
BY ABHIRAM DAPKE
Comments
Post a Comment