Investments are crucial for financial growth which is beneficial in times of financial crisis. There are several types of investment options; each carrying its own pros and cons. Some investment avenues focus on fixed income whereas others are centered around capital growth. Some offer higher interest rates, but come with high risk (such as mutual funds); while others might be less risky but come with lesser interest rates.
Risks involved in investments Every investment carries some level of risks such as economic, market fluctuations and inflation. So when you choose one investment avenue with a high-interest rate, you can be in a loss if the market fluctuation affects you. How to safeguard yourself from the investment risks? The best way to guard yourself against such investment risks is by diversifying your portfolio. Diversifying means investing in more than one avenue, such that there is a perfect balance of risk and interest rate. For example, you can diversify your portfolio by investing in FD, mutual funds and, stocks. So if the market rates go down, your mutual funds might be at risk but your FD is safe investment. If the market rates go up, your FD might not benefit a single penny; but your mutual fund and stocks will. Thus, you have achieved a perfect balance by investing in avenues that are less risky and offer high returns at the same time.
Portfolio diversification minimizes risks and maximizes returns. You can plan smartly on how to divide your capital in different avenues. In either case, you need to invest in FDs to safeguard your capital. Therefore, select a financial institution such as Bajaj Finserv; that offers high-interest rate, flexible tenures, and periodic interest payouts. Visit www.bajajfinserv.in to know more about the investment option.
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About Author:Aman is working in the domain of Investment management in one of the top universities. He has published research papers and case studies in Investment and Fixed Deposit marketplace. He is an avid blogger in the domain of Investment management. you can also find him on social networking platforms. Archives
August 2022
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