In this chapter we are going to evaluate advantages and disadvantages of various investment opportunities and which one will be best suitable option for you. Before going thru evaluation, you should take small quick evaluation for yourself and get ready with answers. This simple process will assist you to draw a road map for your long term investments.
Following five questions you should ask yourself and evaluate the answers before you start reading further and analysis investment opportunities:
- How much cash savings you wish to invest?
- How long you are willing to stay invested?
- How much risk you intend to take on your portfolio?
- What age you are planning to start investments?
- What is the intensity of liquidity you need? or How quickly you want your assets to get converted into cash?
After you have evaluated yourself, let us understand pros and cons of different investments options.
Best Investment Opportunities for your Retirement Income
You can analysis yourself to the best of your idea based on different investment options which suits your requirement:
- After taking into account times of financial crisis, stock market crashes, etc. Stock Market / Mutual funds are among the best high return wealth maker instrument for investors.
- Investing in the stocks of any company gives you a legal ownership of the business to the extent of accumulated stocks and you get benefits from the company profits.
- Companies divide portion of the profit and distribute to shareholder as a bonus and dividends. When you purchase a stock you not get direct profit with increase in stock value but as a legal shareholder you can benefits from profit distributed via other mean ways as well.
- Diversification is very simple. For example: if you wish to invest in real estate and stocks at same time then you can buy real estate stocks to achieve your goals.
- Easy liquidation, Once you place your selling stock order after executed within 2-3 days your stock investment can be converted into cash.
- To ensure extreme safety to investors, Stock market regulatory body with strict laws make sure that no fraudulent activities are performed by companies or brokers which makes stocks as a highly traded instrument by domestic or foreign investors.
Debts / Government Bonds / Fixed Income Deposits
- Debts or bonds investments are highly and quickly convertible into cash assets.
- Normally percentage returns are mentioned prior to investment. So there is no question of returns dissatisfaction later on.
- Once you know expected returns, It is very easy to prepare your personal financial plans.
Real Estate Investment Opportunities
- Huge amount of cash is required for real estate investment.
- One of the physical existence investment options is real estate where you purchase it after physically examining it.
- Such investment options are highly active from long decades and most of the individuals have already done some research on it and are comfortable with this investment option.
- It is hard to get fraud in real estate because of their physical existence which makes real estate comparatively less risky in term of your capital safety.
- Since real estate have physical presents, additional expenses for security and safety need to be paid to safeguard your investment.
- To get good returns, 6-10 years is the minimum amount of duration to be stayed invested.
- Waiting period for liquidity (conversion into cash) in real estate would be of 3-4 months. It can get extended if property deal is not finalised quickly.
Commodities (Gold / Silver / Other Precious Metals)
- Precious metal (Gold / Silver) are safe investment options to meet your growing inflation rate.
- Earlier days security for investment was the major problem even bank lockers were not safe enough. No more security problems now a day’s because now you can purchase precious metals into electronic traded fund (ETF). For example: Gold ETFs invest into 99.5% purity and 1 gram of physical gold is equal to one unit of gold ETF.
- You need to have trading demat account to trade Electronic Traded Funds (ETF).
- You can prefer small amount to start investing.
Arts and Antiques
- A unique investment opportunities with extremely high risk.
- Art cannot be evaluated as assets anything but can be used as an investment option.
- Yardstick or Index to measure art is not available and will not be available in near future as well.
- Investment amount required are even higher than any real estate investment.
- Difficulty in Liquidity, to get other unique investor and to get proper valuation is a major problem.
- Warehouse or storage place is required to safeguard art and antique works.
By now after reading this assessment you should able to select best investment opportunities option. Knowledge is limitless, do not jump into conclusion by picking your investment option and start preparing strategies. Going ahead we will further evaluate investment categories based on different parameters which can even change your investment option you have selected in your mind.
Keep reading…keep evaluating !
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Basics of Investing for Beginners
- Chapter 1: What is Investment and its objectives?
- Chapter 2: Why is Investment important for Economic growth?
- Chapter 3: Ways to Invest your Money and Make Profit
- Currently Reading: Investment Opportunities for your Retirement Income
- Chapter 5: What are the Legal Matters you should know before Investing?
- Chapter 6: Different Types of Investment Risks Involved in Investing
- Chapter 7: When and How to Invest in Stocks?
- Chapter 8: How Positive Attitude can improve your Investing mindset?
- Chapter 9: Should you Borrow Money to Invest in Stock Markets or Funds
- Chapter 10: 5 Rules of Thumb - To be consider before making Investments
- Chapter 11: How to Calculate Stock Market Returns and Break Even Point?
- Chapter 12: How to Calculate Compound Interest and Simple Interest?
- Chapter 13: Rule of 72, 114 and 144 of Compounding Interest formula
- Chapter 14: What is the Difference between Trading, Investment and Speculation?
- Chapter 15: How to become a Smart Investor or a Successful Investor
- Chapter 16: Tutorial Quiz – Basics of Investing for Beginners Module
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3 thoughts on “Best Investment Opportunities for your Retirement Income”
Great thought with good time.
Can you please share stocks for best returns in 3 to 9 months.
We are happy to help you. You can refer to Best Stocks for Long Term Investment in India. I hope you will get better idea from this. Check it out!