Out of all the things that the pandemic caused by Covid19 taught, one thing everyone must have realized is how important it is to save money for any future unforeseen events. The future is always uncertain and you must choose the best investment options not only to multiply your money but also safeguard your money.
Best Investments in 2021 – During the initial stages of a pandemic, the stock markets started to fall, and those you investment completely invested in equities might have realized how important it is to understand the meaning of the sentence “never keep all the eggs in one basket”. 2020 might be a scary dream for those who had not saved the money They must have been scrambling for money. Even the most stable economies collapsed giving huge losses to the investors. But it is another matter that the markets have recovered even faster than expected claiming new hight and reaching record highs.
In this article, we will highlight a few Best investments in 2021 options that will help you to save money, grow your money to beat the inflation, and also reduce the risk of losing the money in a time of crisis.
Below are a few of the best Investment Options. These are suggesting considering you wanted limited or no risk at all and also don’t want to be a full-time investor or trader in stock markets for whom there are other better options. Best Investments in 2021
Certificate of Deposits or fixed deposits.
Short term corporate bonds.
Overview: Best investments in 2021
1. Government Bonds
Government bonds are a type of debt instrument issued by the Central government. In India issued by Government of India or Reserve Bank of India, which act as a banker for Central government. These bonds are a type of instrument used by the government to raise capital for its expenses.
These bonds usually referred to as G-Sec or government securities. These bonds come with different types of returns. usually prominin the investor a fixed rate of return after a certain period of time. The period varies from 5 years to 40 years. Few of the bonds are also tradable in major stock exchanges.
These bonds can also be issued by the state government if a need arises for money by the state government.
Initially, most G-Secs were issued for large investors, such as companies and commercial banks. However, eventually, GOI made government securities available to smaller investors such as individual investors, co-operative banks, etc.
As these bonds are issued by the government and guaranteed by the government, these are the safest investment option with very good returns of the investment. As the change of government going bankrupt is completely Nill or very less, there is no risk involved in investing in these bonds.
These are used by many investors to diverse there portfolio to minimize the risk. If you are an investor who wants no risk, there is a must-have one to add to your portfolio.
G Bonds are out top recommendation in Best Investments in 2021
2. Dividend Stocks
Dividend stocks are those stocks which provide consistent and high dividends to the investors. These are not a riskless investment option, but a must-have option to ensure consistent income to the shareholders.
There is risk in investing in these stocks like the investment in any other company. But usually, high paying dividend stocks are those, who are already profitable and high corporate houses. Hence the chance of these companies going bankrupt is very less. And you can recover a large part of your investment in a few years from the consistent dividends that companies are paying.
Choose those companies which are having a high market value and high profitable and also paying a high dividend. In this manner, you can ensure a consistent income.
3. Certificate of Deposits or Fixed Deposits.
Another type of less risky investment options is to invest in Banks Fixed deposits or Buying certificate of deposits from large banks. Many banks provide a very high-interest rate for fixed deposits when compared to savings bank accounts.
And also the risk involved in these investments is very less. The only risk involved in the bank going bankrupt. You can minimize this risk by choosing those banks which are having a good reputation and consistent performance in the past few years.
Generally, major banks provided an interest rate of around 7% to 8% and this percentage is even high if you are a senior citizen. And also if you wanted to take even little more risk you can deposit in the new and small banks which provided even more interest rate around 9%.
4. Index Funds
Another type of Investment options is again connected to stock market investment. Index funds are those funds which are invested in the stocks of those companies which are part of Index. For example Nifty50, Bank Nifty, or Sensex. These are the top 3 indices in Indian Stock Market. Nifty50 consists of 50 top companies stocks in India. Bank Nifty Consists of top Bank stocks in India and Sensex consists of stocks of 30 Top companies of India.
Investing in the companies which are part of any of these Indices for example investing a certain amount in each of all the bank stocks that are part of Bank Nifty. This is because, over the past few years, The index is always on the increasing trend. Yes, the index will indeed fall and rise and most of the times, the index had fallen very large percentage. But when you see at a longer period, the index has always been in the increasing trend. Right from the start to till date in the longer run the index always gave good returns.
Now there are Mutual funds which invest in this manner and these funds which invest in stocks which are part of an Index are called as Index Funds. You can invest in these funds to ensure safe and consistent returns. Safe in the sense as all the companies part of the index are top companies of India, the chance of bankruptcy is less and even if it happens, the loss in one will be reduced by the profits in others.
5. Short term Corporate Bonds
Short term corporate bonds are another type of investment option to get good returns on the investment. The bonds are like government bonds discussed above, but these are issued by large corporate companies. The corporate companies when in need of money for operations like investing in new projects or for expansion, will issue corporate bonds to raise the money. These bonds will have a fixed maturity period and the fixed rate of return.
This rate of return depends on the risk that is involved in the company. There are many corporate bonds with less risk and good returns. Investors can choose these corporate bonds to ensure safe and good returns. Risk in these can be reduced by choosing bonds from corporate which are of great trust and avoiding new and struggling corporates.
Short term corporate bonds give good returns and hence need to be considered in Best Investments in 2021