Diversify investments to Optimize Returns

Posted on May 17, 2017

Diversifying the investment means distributing it in different portfolios and this might be the one most important rule that could potentially be the profit-maker for the investors. Below are the ways in which investments could be diversified.

Investment in mutual funds

Investments can be made in mutual funds to get the best out of your money. However, it should be kept in mind that these type of investments are for longer periods of time and are also subject to market risks.

Investment in Gold

Investment in Gold especially in India is a very profitable one as the value of gold keeps on increasing as seen by the data in the past decade.

Bank Fixed Deposits

The best bets for investment Bank fixed deposits offer a decent return with very less risk. Currently, fixed deposits range from 5.50% to 7%. In the case of senior citizens, they can even get an additional interest benefit of 0.40% to 0.50% which is an added bonus. Banks also offer MODs or Multi Option Deposit Accounts which are a type of fixed deposit which can be broken into Rs1000/- or Rs500/- and can be withdrawn at any moment.

Apart from the above forms of investments, there are even more such as recurring Cumulative Deposits which is a type of deposit in which deposits can be made on monthly basis. The periodicity can be changed by the customer as he/she pleases. Another type of investment which can be sought by a customer is Systematic Investment Plans or SIPs as they are generally called as. SIPs are deposits made on weekly, fortnightly or monthly basis. This method, however, is subject to market risks as the money is invested in equities, debt markets and derivatives.

Investment in debt markets and equities is another way in which the investment could be diversified. Investments in equities are expected to yield 220 times over a period of 35 years but it comes with high risk as well since the money is invested in the market. Investments in Debt market also yield around 9%-11% more than the fixed deposits.

These investments if made properly could decrease the market risk and increase the return of any customer. The investments, however, need to be done carefully and it also needs to be reviewed on a regular basis to get the best out of it.

Diversify investments to Optimize Returns