INVESTIMENT OPPORTUNITIES IN DIFFERENT ASSET CLASSES

"Don't Put All Your Eggs in One Basket".

- Sailesh Kumar

What is an Asset Class?

Various investment avenues exist to help you invest your savings and earn the highest possible returns with the varied potential risk. These are broadly categorized as asset classes. Asset classes are a group of securities or financial instruments that exhibit similar characteristics and behave similarly in the market. For instance, consider all the gadgets that you use in your everyday life such as mobile phones, landlines, televisions, radios, cameras, etc. A lot of these gadgets have similar characteristics. A camera and a mobile phone could be used to click a picture; a laptop, MP3 player, or radio could be used to play music. However, they are unique in their individual capacities as well and serve different purposes. Asset classes operate quite similarly.

Each asset class is irreplaceable, and no asset class is a perfect substitute for another. Moreover, taxation, risk, liquidity, tenure, market volatility, and returns vary with each asset class. Common examples of Asset Classes include Stocks, Bonds, Mutual Fund, Real Estate, Commodities, and Cash.

Each asset class has its own unique risk-return profile, which can help investors diversify their portfolios and manage their overall investment risk. Investors may choose to invest in one or several asset classes depending on their investment goals, risk tolerance, and time horizon. Asset allocation, or the process of dividing a portfolio among different asset classes, is a critical component of portfolio management and can have a significant impact on overall portfolio performance.

Common examples of asset class investment opportunities

• Fixed Deposits

• Recurring Deposits

• Sovereign Gold Bond

• Equity Investments

• Mutual Fund

• SME IPO / Investments

• Equity Linked Savings Scheme (Tax Saver Instruments)