Avenues of Investments

What are the avenues of investment?

There are many modes or avenues available for the investors to invest. However, some investments are simple to invest. Whereas some investment avenues are complex to invest in that require a lot of analysis and investigation. Some investments are traditional and familiar, whereas some investments are new and unfamiliar for the investors.

As some investment plans may be suitable for one investor and may be totally unsuitable for the other investors. It depends upon the personal objectives of each investor. what are the avenues of investment?

Every investor has some priorities. Because some investors prefer low risk securities. Whereas as some higher return so they are willing to take more risks. Therefore, some investors prefer liquidity whereas some prefer long term investment. Thus, the objectives of each investor are different from other investors that met their priorities of risk and return. So in the stock market every investor would like to purchase that securities which maximises his utility.

Now, let\’s analyse what are the avenues of investment? across the worldwide.

Therefore, some modes or avenues of investments are given as follows.

Direct Investment alternative
Indirect Investment alternatives

Direct Investment Alternatives:-

Direct investment is an investment in which an individual investor makes his decision by his own choice. In which he/she can invest as per his personal judgement. Such direct type of investments are following as

A). Fixed Investment

B). Variable Investment

C). Non Security Investments

A). Fixed Investment:- In fixed principal investments contains fixed principal amount and its maturity amount also known with certainty. A fixed amount invested in such security investment. Its maturity period and rate of return tells us about the returns over the investments. The example of these investments are following as :

Cash,
Saving Bank Account
Savings Certificates
Government Bonds
Corporate Bonds
Corporate Debentures

B). Variable principal Investments:- In these types of securities, whether the principal invested amount is known but the maturity value is not known with certainty. It is known as variable principal investments. As equity Shares have no fixed return over the invested period.

However, preference shares have a fixed return but their market price is determined by demand and supply forces. Some convertible securities like debentures and preferences shares are also convertible into equity shares with some prescribed conditions. So these fixed principal securities are variable maturity values.

These examples are the following of such types of securities.

Equity Shares
Preference Shares
Convertible Debentures and preference shares

C). Non Securities Investments:- Such type of investment contains a fixed amount of investment. Whereas it has less liquidity as compared to the shares. Its maturity value is also unknown. But it includes the price appreciation of investment. Mortgages represent a periodic fixed income.

Thus, Some commodities are bought and sold at a future date according to the future market prices. Thus business ventures directly invest in such types of commodities which are new or growing businesses.

There are some examples of the following commodities of direct investments.

Real Estate
Mortgages
Commodities
Business Ventures
Art, Antique and other valuable commodities.

Indirect Investments:- It is a rapidly growing sector of investment. Which is boosting the allover economy. In such an indirect type of investment, individual investors have no control over the amount invested. In these investments, investors provide their money to a particular organisation. Such an organisation is authorised to invest as per its own desire. These institutions manage funds on the behalf of investors with the help of a group of trustees.

Thus, an investor can invest directly in pension fund, insurance. But in reality investors provide their money to other organisations for the purpose of investing. So such a type of investment is invested indirectly instead of directly. These alternatives of investments are as. what are the avenues of investment?

Pension Fund
Provident Fund
Insurance
Investment Companies and
Unit Trust of India

These companies Invest their money by their own choice. They give return back to the investors as per the predetermined conditions between companies and the individual investors. They have to accept their terms and conditions before they invest in such a type of company. Who invests on behalf of the investors. what are the avenues of investment?

Conclusion:- There are two types of investment avenues through which investors can invest. As a direct method and Indirect method of investment. Where in direct method control of the investment is directly within the hands of the investors. Whereas, in the indirect avenue control of investment is not in the hands of the investors. Because it is an indirect investment. This answers about what are the avenues of investment?

However, Any investor who would like to invest in such an investment avenue. They must know the pros and cons before investing in such an avenue. You must know the terms and conditions of SEBI about the investment avenue and stock market. what are the avenues of investment?

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