Where can you Invest?

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 Where can you Invest



What are asset classes?

As mentioned in the first post there are many kinds of asset classes. There are different amounts of ROI (return on investments) in different types of asset classes. Any place where you invest your money is a different kind of asset class. Umm in an asset class there can be different sub categories such as you can buy equity from other market places. 





Asset classes covered :-  

  • Equity (Stocks)

  • Debt (Bonds)

  • FDs

  • Real Estate 

  • Cryptocurrency 

  • Gold & Silver 



As we have discussed about Equity we will not focus on it in this blog. 


  1. Debt (Bonds) - How do people get bankrupt?

Debt funds is a transaction done between two people one is the lender and another is the borrower, the borrower wants the money at urgent and the lender wants to give money because he/she have a bunch of money in stock so he/she gives the money, but don’t wants to give their money for free, so in exchange the borrower will pay the money with interest amount, the interest can be played with two ways as I mentioned before in the first episode simple interest and compound interest.


Debt is clarified in a more formal way named as Bonds. Bond is nothing but a piece of paper showing the agreement of the following debt. Bond is nothing but an investment in debt securities. 


Well debt funds don't hold a risk in short term payment whereas on the other side we saw that the equity fund holds a lot of risk in the short term, this is because, first in simple for your better understanding debt are also known as or usually heard of as loan. So basically if a person is lending some money his ability to pay would be higher in the short term notice than the long term notice, well trusting people would not be easy when giving at longer time notice at that time we see credit risk, credit risk is nothing but a person’s or a organization’s ability to repay the debt, we look on it in future podcasts.


  1. FDs - Is our money growing with time?

Fixed Deposits are actually worth it, I have seen many of my surroundings investing FDs, but should we really invest in FDs? 


At the end of the tenure, you receive the amount you have invested plus compound interest. FDs are also called term deposits.


Usually a FD works completely like a debt fund just it has a fixed rate of interest, currently it is approximately 4-5% and taking into account that inflation rate is 6-7%. In every instance the rate of interest of FD would be lower than the rate of inflation meaning that banks are eating up our money throughout the time and the money is just growing in numbers and is depreciating in value. 


  1. Real Estate - Is our money growing with the development of the world?

Real Estates is one of the most commonly used investment options by Indians. Whenever an Indian is thinking about securing his/her money, their first thought would be about investing that bunch of money into a land, obviously in expectation of growth of money. 


Real estate investment growth is not completely in our hands, there are some external factors which will impact the investment, such as the development of that specific area, weather conditions and society. Some internal factors that are in our control could be maintenance of that property. 


Well Real Estates hold a good amount of risk as we don’t know how the world will change throughout the time. 


  1. Cryptocurrency - The future of our world?

The world is enhancing, there has been a lot of advancements in technology which led to the beginning of digital wallet. 


Cryptocurrency is a digital payment system that doesn't rely on banks to verify transactions. It’s a peer-to-peer system that can enable anyone anywhere to send and receive payments. Instead of being physical money carried around and exchanged in the real world, cryptocurrency payments exist purely as digital entries to an online database describing specific transactions. 


When you transfer cryptocurrency funds, the transactions are recorded in a public ledger. Cryptocurrency is stored in digital wallets.


  1. Gold and Silver - How can we generate money from Earth’s crust?

Commonly people invest in gold and silver, which have some great properties such as lustrous and least reactive metals. As it is found from earth’s crust and also known as one of the rarest metals present on the planet earth makes it more special. Day by day gold and silver gets scarce and due to that reason the value of gold and silver increases day by day. 


The volatility in silver prices can be two to three times greater than that of gold on a given day. While traders may benefit, such volatility can be challenging when managing portfolio risk.


These are some of the most common asset classes you should have been introduced to before investing. 


Sources:-

https://www.morganstanley.com/articles/investing-gold-silver-decision-guide

https://www.kaspersky.com/resource-center/definitions/what-is-cryptocurrency

https://www.google.com/url sa=i&url=https%3A%2F%2Fwww.investopedia.com%2Fterms%2Fa%2Fassetclasses.asp&psig=AOvVaw33y39pgH-wglPioLGNeayZ&ust=1682710515143000&source=images&cd=vfe&ved=0CBEQjRxqFwoTCOD24aXnyv4CFQAAAAAdAAAAABAE

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