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A study of best investment options with respect to opportunities for the

investors

Article in International Journal Of Applied Research and Studies · August 2021

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Manjushri Kadam Shabana Memon

Bharati Vidyapeeth Institute of Management Kolhapur Bharati Vidyapeeth Deemed University Institute of Management, Kolhapur
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 Interna tional Jo urna l o f Applied Research 2021 ; 7 (1 0 ): 168 -1 70

ISSN Print: 2394-7500

ISSN Online: 2394-5869
Impact Factor: 8.4
A study of best investment options with respect to
IJAR 2021; 7(10): 168-170
www.allresearchjournal.com
opportunities for the investors
Received: 22-08-2021
Accepted: 24-09-2021
Manjushri Kadam and Dr. Shabana A Memon
Manjushri Kadam
Assistant Professor, Abstract
Department of Management Investment is the most important aspect in the human life the best habit is to save the money for using
Bharati Vidyapeeth Deemed to in the emergency of the future requirements. The major options for investment are available to the
be University, Pune.
investors he has to decide upon best option for investing his or her hard and fast money in best possible
Institute of Management
Kolhapur, Maharashtra, India
scheme so that he gets good returns and financial stability is achieved. The paper is decent contribution
in creating the awareness about the investment options and how to take proper decision for the
Dr. Shabana A Memon investment of the extra funds we have with us. The various plans are taken in to consideration to study
Assistant Professor the best option for the investment decision.
Department of Management
Bharati Vidyapeeth Deemed to Keywords: investment, investor, finance, issues, risk, mutual fund, provident fund
be University, Pune.
Institute of Management 1. Introduction
Kolhapur, Maharashtra, India
Investing is essential to achieve your goals. It is the only way to make your future better. By
making investments, you are also saving and accumulating a corpus for a rainy day. Apart
from that, making regular investments forces you to
set aside a sum regularly, thereby helping you in a sense of financial discipline in the long
run.

2. Impact of Inflation and the Importance of Investing

Inflation, in simple terms, is a surge in the price of materials and services. It decreases the
worth of your money and reduces your purchasing power. When there is a rise in the
inflation rate, you buy fewer things with the same amount of money. You have no control
over the inflation rate. If you are to stay ahead of inflation, you need to have more money to
purchase the extent of the goods you intend to in the future with the money you have today.
But, money doesn’t grow on its own. If your money has to grow, then it has to earn returns.
To earn returns, you need to invest. Therefore, making investments is necessary to tackle
inflation. Inflation at the rate of 8% means that you need 8% more money than what you
have to purchase the same item next year. Here’s how inflation at 8% reduces the worth of
Rs 1 lakh over eight years:

Impact of Inflation and the Importance of Investing

Amount in hand now Rs 1,00,000
After one year Rs 92,000
After two years Rs 84,640
After three years Rs 77,869
After four years Rs 71,639
After five years Rs 65,908
After 6 years Rs 60,636
Corresponding Author: After 7 years Rs 55,785
Manjushri Kadam After 8 years Rs 51,322
Assistant Professor,
Department of Management It is very important to earn inflation-beating returns, if not, you may not be able to afford
Bharati Vidyapeeth Deemed to
materials and services in the future from the savings you are making now.
be University, Pune.
Institute of Management
Kolhapur, Maharashtra, India
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International Journal of Applied Research http://www.allresearchjournal.com

3. Types of Investments investments. Equity investments are the best example of

You have numerous investment options to choose from. active investments. On the other hand, passive investments
You have to assess your requirements and risk profile before do not require you to be hands-on with your investments.
deciding to invest in any particular investment option. You invest your money and stay invested for a certain
Investments are broadly divided into active and passive. duration of time. It is also referred to as the buy-and-hold
Active investment requires you to dynamically change strategy of investment. This strategy of investment is
assets in your portfolio, depending on the market and advisable for those who can’t spare time to manage their
economic developments. You need to have enough time and investments. The following table shows the major
knowledge of investments to indulge yourself in active differences between active and passive investments:

Differences between active and passive investments

Parameter Active Investments Passive Investments
Suitability Individuals with an in-depth understanding of finances Everyone
Cost of Higher as you frequently trade securities (mostly equities) Lower as you buy and hold securities for a longer
investment in your portfolio period
Risk involved Higher as you frequently buy and sell securities Lower as you hold securities for a longer time
Return potential Higher Lower

You have to choose to adopt either an active or passive parameter is to be very clearly found out for the selection of
strategy after you have assessed your requirements and risk the Investments options available with you to decide.
tolerance level. The minimum risk at various age and

Source: https://financialmentor.com/inve.

4. How should I plan my investments? 2) Mutual Funds: Mutual funds have been around for the
The first step in planning your investments is to figure out past few decades, and are gaining popularity amongst
the right investment that fits your profile and needs. Here millennials. A mutual fund pools investment from
are a few things to keep in mind when planning your various individual and institutional investors who have
investments: a common
• Choose investments carefully after doing adequate 3) Fixed Deposits: Fixed deposits are an investment
research option offered by banks and financial institutions under
• Don’t fall for quick-buck schemes that promise high which you deposit a lump sum for a fixed period and
returns in a short time earn a predetermined rate of interest. years.
• Review your stock and mutual fund investments 4) Recurring Deposits: A recurring deposit (RD) is
periodically another fixed tenure investment that allows investors to
• Consider the tax implications on returns you earn on invest a fixed amount every month for a pre-defined
your investments time and earn a fixed rate of interest. Banks and post
• Keep things simple and avoid complicated investments office branches offer RDs. averse investors.
that you don’t understand 5) Public Provident Fund: Public Provident Fund (PPF)
is a long-term tax-saving investment vehicle that comes
All above options are to be scientifically and seriously with a lock-in period of 15 years.
studied before making investment decision. 6) Employee Provident Fund: Employee Provident Fund
(EPF) is another retirement-oriented investment vehicle
5. Popular Investment Options in India that helps salaried individuals get a tax break under the
1) Direct Equity: Direct equity, commonly referred to as provisions of Section 80C of the Income Tax Act, 1961.
investing in stocks, is probably the most potent 7) National Pension System: The National Pension
investment vehicle. System (NPS) is a relatively new tax-saving investment
option. Investors subscribing under the NPS scheme
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International Journal of Applied Research http://www.allresearchjournal.com

will mandatorily stay locked-in until their retirement 6. Thorp, Edward. Kelly Capital Growth Investment
and can earn higher returns than PPF or EPF. This is Criterion. World Scientific 2010 ISBN 9789814293495.
because the NPS offers plan options that invest in 7. Website References:-
equities as well. The maturity corpus from the NPS is https://en.wikipedia.org/wiki/Mutual_funds_in_India,
not entirely tax-free, and a part of it has to be used to https://en.wikipedia.org/wiki/Mu.
purchase an annuity that will give the investor a regular
pension.

Source: https://instaquoteapp.com/category/b.
Popular Investment Options in India

6. Future scope of the Investment for the Investors

The Investment are always better to safeguard our future in
terms of financial aspects The proper planning and proper
financial investment decision will give better returns to the
investors

7. Conclusion
The Investor awareness and knowledge about investment
options is very important to take the proper and correct
investment decision. This paper is a decent contribution in
creating awareness about the investment options and how to
take proper investment decision also reduce the financial
risk. The advantages and disadvantages are to be compared
with our own available funds for the investment. The Risk
avoidance strategies have to be followed to safeguard our
financial assets in the long term.

8. References
1. Bazaz, Shivani (14 October 2019). "Reliance Mutual
Fund is Nippon India Mutual Fund now. Should you
exit?". The Economic Times.
2. Goetzmann, William N.; Rouwenhorst, K. Geert. The
Origins of Value: The Financial Innovations that
Created Modern Capital Markets. (Oxford University
Press, ISBN 978-0195175714)), 2005
3. K. Geert Rouwenhorst (December 12, 2004), "The
Origins of Mutual Funds", Yale ICF Working Paper
No. 04-48.
4. Fink, Matthew P. The Rise of Mutual Funds: An
Insider's View. Oxford University Press, USA. (2011-
01-13). ISBN 978-0-19-975350-5.
5. Pozen, Robert; Hamacher, Theresa. The Fund Industry:
How Your Money is managed. Hoboken, New Jersey:
Wiley, 2015, 8-14. ISBN 9781118929940.

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