Everyone dreams of becoming rich from the stock market, but the recent huge fall has revealed the reality of this dream. This ups and downs in the market have given sleepless nights to many investors who were investing their money in equity just for the sake of earning quick money. Now they are understanding the bitter truth that the stock market does not always run in the upward direction. When it reverses gears, short-term investors in particular suffer huge financial losses. If you are a person who does not want to take any kind of risk on your hard-earned money, then it is wise to stay away from the stock market. Now the question arises that if not the stock market, then where to invest the money?
The world beyond FD
For the common Indian investor, safe investment often means only bank fixed deposits (FD). But, apart from FD, there are many great options available in the financial market, where the security of your money is almost assured. One of these big and trusted names is ‘Debt Mutual Fund’. Debt funds keep your money away from the ups and downs of the stock market and invest it in government and big company bonds or other fixed return instruments. The best thing is that here the responsibility of handling your investments lies with experienced fund managers who have a deep understanding of the market.
Freedom to withdraw money anytime
If you have some extra money and want to keep it safe for a few months or a very short period of time, then liquid funds or short duration funds can prove to be a great tool for you. Their biggest specialty is their ‘liquidity’. This means that whenever you suddenly need money, you can withdraw your money immediately and it gets directly credited to your bank account within no time. This is why it is a very popular option among investors who want to park money for short term.
source of regular income
Non-Convertible Debentures (NCD) are also a strong contender in terms of safe investment and fixed returns. Big companies raise money through NCDs in the form of loans from the general public to further their business. In return, investors are given a fixed interest every year, information about which is given even before investing. You can choose long term NCDs of 5 years, 10 years or more as per your convenience. On completion of the deadline, the company returns your principal amount back to you. However, the thing to keep in mind here is that always invest money in NCDs of such companies whose credit rating is very good (high rating).
Investing in Direct Government Bonds
There was a time when investing in government bonds was a very difficult task for the common man, but now the situation has changed. Today, there are many digital platforms available which allow retail investors to invest money directly in Government of India bonds. Since these bonds are directly guaranteed by the government, they are considered the safest investment in the market. Investors get the benefit of annual interest on these also.
Economic experts always believe that a common investor should never invest his entire capital only in shares. People who hold only shares in their portfolio have to suffer the most when the market falls. On the contrary, investors who have diversified their money across different options like bonds, debt funds and FDs, their portfolios are largely safe even in the current downturn.