Avalokan

Where to Invest?

In this second part of the series on Investment we discuss the various avenues of investments where one can park her money for good use.

We have already seen the importance of investments and how it is a great tool for making your money work hard for you. Now let’s look at the options that are available for us to do that.

The nature of investments one chooses depends on two factors:

• One is the stomach to take risks or the risk appetite of the individual. It decides how much risk an investor is willing to take for her money to grow. Needless to say that in any investments one rule reigns supreme: The greater the risk the higher the gains (or the losses). The risk appetite is the supreme criterion for deciding any type of investments.
• The other factor is the investment goal. The basic reason why a person is planning an investment and what she expects out of it. A 30 year old executive has the time on her side and thus can choose the investment option which gives high growth as the investment isn’t supporting her, while a 70 year old retiree would want to choose an option which safeguards her hard earned money and gives steady assured returns as this is what her main income is.

If you noticed both the factors are closely linked as a high risk investment option would have the potential to give high returns (or high loses) while an assured return would be promised only by an investment option which isn’t much inclined to risk taking.

So before one is certain about the nature of investments one wants to make, the risk appetite and the investment goal should be made clear first. Ask yourself:

• Am I willing to take calculated risk?
• Is Time on my side?
• Is this investment my supplementary income?
• I don’t care about an assured income, I want to see my money grow and grow fast.
• Is this my retirement plan?

Once you are sure about your answer to these questions, you can move onto deciding which investment plan you want to go ahead with. The market provides investment option for every risk appetite category.

• Low risk and low return

Investment options available in this category are Bonds offered by stable governments, Other Debt instruments where in a party borrows your money and promises an assured sum after a fixed period of time. Such instruments offer low returns on money but the returns are virtually guaranteed.

If the answers to most of the above mentioned questions are in the negative then this option suits you the best.

• High risk and high return

The instruments in this category love to take risks and compound money in leaps. It consists of instruments like Equities, Derivatives, Forex trading etc. These instruments have much more rewarding potential than the other instruments discussed as they are not at all risk averse. Practically they don’t assure any returns and if your luck is really bad even your principal may vanish in thin air. But that’s not the case always. As I discussed in my last article these instruments must be handled with care and you must know what you are getting into. Moreover they require time and effort from the investor to provide good results.

If the answers to any of the above mentioned questions are in the affirmative then you surely are not risk averse, go and choose this option as your medium.

• The Moderates

I call it the moderates as the instruments under this category provide the middle path of the other two categories. It consists of a marvelous option called Mutual Funds. This Instrument is a highly flexible investment option, which provides the elements of both the worlds. Many types of funds available in the market take your money and either promises you steady income or high returns depending on the risk taking capability of the fund.

They neither require your time or effort from your part for your money to grow. Needless to say the fund managers take a part of that investment from you as their fees. Most mutual funds, given time and if managed properly give handsome returns to the investors.

All the instruments discussed above have been designed for capital appreciation and what suits an investor’s needs is a totally personal decision. Whatever investment decision an investor makes a positive attitude and an emotional detachment from the investments goes a long way in deciding the success one has. But more on this later!

Having mentioned these options I would like to reiterate that these are only my views and an attempt to explore the wide world of investments and it might not be treated as exhaustive under any circumstance. It’s only an attempt to get things started with those who might have a negative view on investments or for those who might still be searching about where to start.

If you found this article helpful do post a comment or two about what you thought about it

Starting today, I would be posting some of my personal views on the importance of Investments and how things can change if you go about it in a systematic manner!
I must emphasize here that these views are based on my understanding of the topic shouldn't be considered complete or exhaustive on the subject. Hopefully they would prove to be useful to the reader !!!

It was a happy moment for me to be part of something I had admired for so long. It was "Ant-tak" or अंत तक in Hindi, a group of friends and family which knows how to enjoy life and has chosen music as the medium to do just that.

The official blog of this group called Anttak describes itself as "a group that just enjoys music singing and dancing just for fun. We organise the gathering at one of the homes of the participants, randomly, in turns. The music is usually accompanied by karaoke music and live instruments. This is purely for a closed group of families who just love music, to sing and listen."

My first experience of this cool group was a frolicking 12 hours of singing, dancing "Sakkat maja maaading". Boy o boy no body was a 50 year old there!!! This happened on 19th of april.
(I think the pics say it all)

It all started with the group meeting at Venkat n priya's place in a rather formal manner which gave me an impression that it would be another one of those "oldies parties" but boy was I proved wrong throughout the get together as I was the only one who remained seated throught (due to my illness). Everyone , even the 70 year old granny got up her feets to shake a leg or two and it was fun all throughout. Everybody seemed fully determined to have the time of their lives in those few years they were all together. And in between there were sweet melodies, oldies sung be elders and some poem recitals/songs sung by small kids, and by small i mean even a 3 year old kid.
But what blew me off was a full shloka recital by a kid named Akshay who did it with full josh and confidence( check out the pic).

Initially I had my apprehensions about this get together and wanted to give it a miss due to my illness but decided to go to cheer my sister Geetika who was supposed to sing one of my favourite songs ( Maa from the Movie "Tare ZAmeen Par").


But the whole concept instantly became a great hit with me as inspite of my illness I could feel the energy and enthusiasm of the people there.
I had a great time meeting such enthusiastic people and I am amazed to find myself desperately waiting for the next get together which is scheduled sometime in the middle of this may I am told.
Hopefully I would be able to enjoy and take part more actively the next time it happens.
Three cheers to अंत तक !!!

It was the best Wimbledon match I have watched and I am talking about the epic Federer-Nadal showdown at SW-19 on July 8, 2007.
Federer was supposed to be the master of grass and Nadal the king of clay but life is rarely all black and white.The match was a thriller even before it had began and why not , with Nadal fast becoming so much comfortable on a surface which was so alien to him not so long ago and Federer having a Borg record in his sights which many greats have failed to equal, we already had a great classic in the making.
And classic it was...but slightly unnerving too for me being a Roger Federer fan.How are we supposed to believe that while Federer had to fight tooth and nail for his respective set victories, Mr.Nadal takes away his sets with so much ease, breaking Federer serve almost at will.
The start couldn't have been more auspicious for Federer who broke Nadal in his first service game, but that was it.
Was it Federer's lack of concentration or was it simple the genius of the young spaniard's stroke play that Federer didn't have any answer to? I have seen Federer's concentration to be flawless so i believe it must be the other reason.Because all i know is that for most of the match the Swiss Ace was as clueless as our Cricket team (Indian).
But he did win and thats what matters , isn't it? well well well, I did watch him win 4 successive Wimbledons and watched him again to win his 5th.But deep down I know I didn't want him to win in this fashion..I want him to run through his opponents like he usually does..

C'mon Feddy show everyone what you are made of...Come next year Win the French Open and Wimbledon both and beat Nadal heads down both place...then only we will be satisfied coz anything less is a torture !