Everyone needs a solid financial plan that needs to take into account one’s life goals, commitments and risk profile. Different life stages may need a different investment option but it helps to have diversified investments as they ensure a sound risk-reward balance.

Opting for only one investment option means that you are unable to optimise your savings. Not all asset classes may be equal and each one performs differently at different points in time. It is important that you have a bouquet of investments. Here are six of them that you can consider for your investments.

1. Equity/stocks:
Investing in the stock market is a popular investment option. However, you would need to take into account your risk profile before doing so. You would also need to have a clear view of your goals, investment horizon and income. The benefits of investing in direct equity is that it is a high-reward option. Also, the shorter durations compared to some other investment options like fixed deposits make them attractive. Gaining a good understanding of some options such as stop loss and tracking news and announcements pertaining to a company whose shares you have bought and generally staying updated help a great deal. In spite of the inherent volatility of the markets, you can maximise your returns in quick time. All you need to do is open a trading and demat account and start your investment journey.

2. Mutual funds: If you are not into individual stocks you could look at mutual funds as they are a combination of shares, bonds or other securities making up a fund. There are many types of mutual funds, including debt and equity mutual funds, depending on which is the predominant investment. The primary advantage of investing in a mutual fund is that it is convenient. The sheer diversification and allocation of assets to ensure a balance of reward and risk make it a good option. Depending on your risk profile, you could invest in different types of mutual funds over the short, medium or long-term. You can also take the systematic investment route (SIP) where you make regular periodic payments for a long-term benefit. Open a demat and trading account and you are good to go.

3. IPOs: Initial Public Offering or an IPO allows an investor to buy the shares of a company and turning shareholders. An IPO allows you to pick up a winning stock at a reasonable cost. However, it is important to do thorough research on a company, its products or services, its growth path and its profits over the past few years before investing in an IPO. There is also IPO funding offered by some banks and NBFCs to help you invest in an IPO. You would need a trading account alongside a demat account to apply for an IPO, much like you would need for mutual funds or equity stock.

4. Gold: Gold is an asset that acts as a hedge against inflation and as an option that an investor can fall back on during volatile times in the market. You don’t necessarily have to buy gold ornaments for investment. Also, buying jewellery involves making charges. The solution is to buy gold coins online and ensure that they are stored safely till a time that you want delivery of the coins. Digital gold investment or e-gold is convenient and safe. You can buy or sell e-gold from anywhere and anytime, from the comfort of your chair. You can also buy gold exchange-traded funds or ETFs but they don’t have the benefit of providing you physical gold. With e-gold, you may seek delivery in physical form at any point.

5. Bonds: Bonds are fixed income investment options and are basically considered as a loan that an investor offers to the company or government that issues them. You get a fixed interest payment for a specific amount of time. Your principal is repaid to you at the time of maturity of the bond. If you are a stockholder, you own a part of the shares of the company. On the other hand, if you are a holder of bonds, you are a lender to the company or government. If you are risk-averse, bonds may be ideal for you as there is lower volatility risk and also a steady income.

6. FDs: Fixed deposits are traditional forms of investment and considered safe and risk-free. Fixed deposits also guarantee fixed source of returns and allow you the flexibility to break them whenever you need. Also, the interest rates are attractive. Fixed deposits also allow investors to take loans when needed. If you are looking to diversify your investment portfolio, fixed deposits offer that much needed cushion against your other market-related risk-based investments. It is a good-to-have option alongside other investment options.

Conclusion

It helps to have more than one investment option so that you can have a diversified investment portfolio. Having a couple of options means you have a balance in your risks and rewards. Make sure to do your research before you pick any investment option. Most of them would require you to open a trading and demat account to get going which can be done online seamlessly.