TradeTheTip

Cheat Sheet : Investment products at a Glance 🎯

Education
NSE:RELIANCE   RELIANCE INDS
1) Cryptocurrencies: Highest Risk, Highest Return :-
There are 3 main types of Cryptocurrencies in the market now which are the most actively traded – Bitcoin , Ethereum , and Litecoin. Think of this as a new version of a stock, where the underlying thesis is the idea of decentralized ownership and value. For any other currencies in the market, for eg. USD , it is debt-based and backed by the respective monetary authorities. This also means that they are free to increase or decrease the supply to implement their policies on the market. For cryptocurrencies, they are limited in supply, hence the free market is completely at play here (demand and supply).

2) Stocks: High Risk, Highest Return:-
A stock (also called a share) is a part of ownership in a company. It represents a claim on the company’s assets and earnings and what that entitles you to do is to attend the Annual General Meetings (AGMs) and dividends payout if declared by the company. So essentially by buying into this company, you are betting that the management team and company fundamentals are able to get you more returns.

Total Returns = Capital Appreciation (price increases) + Dividend Payout (cash payouts)

3) Exchange Traded Funds ( ETF ): High Risk, High Return
Think of ETFs as an investment fund which is traded on a stock market. Essentially when you buy a stock of an ETF , you are buying into a basket of weighted shares. – diversification. Being actively traded also brings many benefits, namely, efficiency as well as liquidity compared to funds where often you would need to go through a long process to buy and sell the holdings. You can get a rather efficient price for your holdings at almost any time.


4) Unit Trust (Mutual Funds): High Risk, High Return
An instrument whereby you pay fund managers a fee of between 0.5% to 2% yearly to manage a pool of money (fund). Essentially their main goal is to outperform the benchmark return Where it is justified if they can outperform the market, they should indeed earn that fee because they know how to navigate and invest in the market better than you.

5) Bonds: Moderate Risk, Moderate Return
A bond is a type of debt instrument where an investor loans money to an entity. The entity can either be a corporate or more commonly government body. The purposes vary but it is mainly to raise funds for a defined period of time at a defined variable or fixed interest rate.

if you loan the amount for a longer period of time, the % interest increases towards the maturity date. As a bondholder, you reserve the right to the future payout at the maturity date. Something interesting about bonds is that they come in various types such as a Bond ETF (where it is a diversified basket of various bonds traded on the market) or a Bond Fund (where it is an actively managed basket of bonds with a purpose to beat the bond index)

6) Endowment: Low Risk, Low Return
An endowment policy is actually dressed up as a life insurance contract designed to pay a lump sum after a specific term (on its ‘maturity’) or on death. Usually, the structure is one which involves regular payments into this endowment fund held by your insurance company which then decides to invest and bring in some returns. Therefore it is a mix of some protection and forced savings plan (with a little better interest than a regular savings account normally)

7) Savings: No Risk, Negative Return
This is the most straightforward of all the different options. Actually, this is not an investment option but it is planted in the illustration above to show you how much you could be losing if you put your money in a normal savings account and not touch it. I think it is clear that the main goal is to have enough rainy day/opportunity funds of about 6 months of monthly expenses in this account. Next, by optimizing for an account which gives you the highest interest rates (although usually ranging from 1.5-2.0%). We actually did a useful comparison of which accounts make the most sense for you.

Guys check out the related ideas as well, it will work for you !

🙏FOLLOW for more !
👍LIKE if think is useful !
✍COMMENT Below your view !




Social Media Handles :-

📌 INSTAGRAM = Short videos
📌TWITTER = Important events
📌TELEGRAM = Intraday stocks & other updates ( FREE )
📌YOUTUBE = Detailed Price action analysis video
📌WHATSAPP = Premium Updates

http://linktr.ee/TradeTheTip

Comments

One should have big understanding to prepare this kind of stuff. Nice work, keep going. . .
+3 Reply
TradeTheTip Tradersasi23
@Tradersasi23, thank you 👍
Reply
nice effort taken
+2 Reply
TradeTheTip rachanak
@rachanak, thank you very much sir 👍👌
Reply
I really like the way u keep things so simple yet easy to understand , I have learnt quite a lot from ur analysis
Thanks :)
May God give u more wisdom
+2 Reply
@RintuR, ohh that's very nice & will keep posting educational studies .
Reply
Nice explanation, easy to understand. Good job.
+1 Reply
@dpk0106, thank you , hope this idea have given uh some insights on investment products
Reply
Nice read...
+1 Reply
TradeTheTip Piyush-Gupta
@Piyush-Gupta thank you sir 😀
Reply
Home Stock Screener Forex Screener Crypto Screener Economic Calendar How It Works Chart Features Pricing Refer a friend House Rules Help Center Website & Broker Solutions Widgets Charting Solutions Lightweight Charting Library Blog & News Twitter
Profile Profile Settings Account and Billing Referred friends Coins My Support Tickets Help Center Private Messages Chat Sign Out