Everyone wants to have a secured financial future and wants to create wealth, but very few people are successful in securing their future. A smart financial planning is the key to achieve all the financial objectives of life and one of the essentials of smart planning is a good investment. In this article, we will discuss some of the best investment options that have the potential to generate wealth creation and provide lucrative returns on investment.
1. Mutual Fund Investment
Mutual Funds, especially equity mutual funds are considered as one of the best investment options in today’s scenario. With a wide range of fund options, themes’, investing style and tax-friendly norms and inexpensive cost, a mutual fund is truly a lucrative investment product in terms of wealth creation. This investment option is suitable even for those investors who are new to the market and wants to create a corpus. In order to achieve maximum return on investment one just need to keep patience and be disciplined in investing money in MF. Even though the risk involved in mutual fund investment is high but with a lower expense ratio, Mutual Fund investment is a money-spinner when it comes to creating wealth.
2. Employee Stock Option
In today’s day and age, many salaried individuals have the facility of employee stock opinion. Nevertheless, only a few consider it as a good investment option. However, after the recent alteration in the stock market, it is burgeoning as the easiest investment instrument in terms of investing, observing and redeeming. Employee stock plans are specifically designed to invest majorly in stocks of sponsoring employers. Apart from a great investment option, the ESOPS also provides a tax benefit to the investors. In employee stock option the companies get the advantage of current cash flow by issuing treasury shared or new shares to the ESOP.
3. Gold Bonds
Gold bonds are remunerative investment option. This is because it is a great asset which provides the combined benefit of safety investment with fixed income part of bank FD. Thus, one can always gain profit even if the price of gold falls and can generate wealth over a long-term period. While there have not been major changes in the price of gold over the past few years, it is always considered as a safe haven asset for investors even when the financial market witness a downfall. Moreover, once the gold prices rise then the investors can get the fixed interest along with the benefit of price appreciation.
4. Real Estate
If we talk about long-term perspective then real estate can be considered a great option of investment. The property location is one of the most important factors that will define the value of the property and also the rental that can be earned. Investment done in real estate can earn returns in two ways rental and capital appreciation. However, as compared to other asset classes there is less liquidity in real estate.
5. Focused Portfolios
Focused funds are funds which hold a comparatively small variety of stocks. In focused portfolio, investors focus on a specified number of stocks in a limited number of sectors rather than investing in a diversified equity fund. By choosing only 10-15 stocks and focusing on it over a long period of time can help to generate high returns on investment.
Under the focused approach of investment, the investors can gain more by investing in the various stock options with the individual stock up to 5 to10 percent. That being said, in a wider portfolio, the stock weighs between 1 to 2 percent. It is because the money is invested in 40 to 50 stocks.
A 1 percent weight of a stock offering 100 percent returns will become 2 percent due to higher exposure to the risk. Under the focused approach of investment, the higher the risk is, the higher the returns will be.
If investors want to neutralize the risk exposure, investment experts recommend investing in top quality stocks.
Wrapping it Up!
Knowing the best investment options helps the investor to make better investment choices. When it comes to investment, one option doesn’t fit all. While different investors have different financial goals, the selection of the investment option must be based on the investment goals and investment horizon.
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