investment

 

Many types of investment options are ideal for beginners like stocks, mutual funds, bonds and real estate. All these have some unique characteristics. Anyways, here is the list of different investment avenues available to the beginner investors.

Mutual funds

Investing in mutual funds does not require you to directly invest in the stock market. The qualified fund manager invests your hard-earned income to judiciously selected a bunch of stocks, so as to maximize the return. For the beginners, one excellent option would be to invest in open-ended funds, which can the bought and sold throughout the year. Moreover, they do not have a fixed maturity date, so you can own them in perpetuity.

Balanced funds

Balanced funds invest in equities as well as in fixed income securities. The aim is to minimize the uncertainty of equity market investing and to ensure some regular return. These are indeed good investment options for the beginner investors as this strike a balance between regular returns and growth.

Bonds

Bonds are a comparatively safer form of investment. Purchasing Treasury bonds can help the beginner investors to arrest the uncertainty of stock market investing. However, over the long run, returns on bonds are less than the returns on equities.  

Growth funds

Another option for the beginner investors would be to invest in growth funds. These pure equities funds and offer you an excellent chance of medium-term and long-term capital appreciation. In the long run, the growth funds indeed help you build up substantial wealth.

Sector funds

It is seen quite often that the stock of a particular sector (say, IT or pharmaceuticals) outweigh the overall market index. Depending upon your own discretion, you can choose specific sector funds which you think will outperform the market.

However, like all investors, the beginner investors should also diversify their investment in various avenues so as to minimize the risks.

Leave a Reply

Leave a Reply