It is important to remember that investment needs will vary from individual to individual, based on factors such as their income, family size, financial liabilities, etc. Savings and investments are an essential part of managing your finances. Investments help create
wealth and allow us to deal with inflation and increased cost of living. They are also our insurance for dealing with future uncertainties. While many investment options are available, it is important to choose according to your risk appetite and investment goals. To help you make informed decisions about which investment is better, here is an in-depth comparison between Fixed Deposits (FD) vs. Stocks vs. Mutual Funds vs. Gold vs. Cryptocurrency.
So, which investment is better?
As is evident, each investment option has its own advantages and disadvantages. For the majority of people, the safest options are fixed deposits (FDs) and gold. You need not be hassled by the prospect of buying and selling physical gold. You can instead buy digital gold that is backed by actual physical gold. It is a safe way to transact in gold, all while getting all the benefits of investing in physical gold. Many banks as well as certain companies such as Tanishq, MMTC-PAMP, Caratlane, etc. offer digital gold investment options.
Talking about equity stocks and mutual funds’ investments, you may need to develop a good understanding of how the stock markets work. You will have to invest time and effort, along with your savings to get the best returns from stocks and mutual funds. Or, you can simply outsource such tasks to your bank or mutual fund players.
You can seek guidance from mutual fund providers such as Nippon India Mutual Fund, Mirae Asset Large & Midcap Fund, Motilal Oswal Mutual Fund, HDFC Mutual Fund, SBI Mutual Fund, etc. Equity stocks and mutual funds can deliver returns that are much higher than the rate of inflation. This is why these are considered better than fixed deposits and gold investment. However, as the risk is higher, you need to tread with caution.
Talking about cryptocurrencies, it is important to note that these are not backed by any type of physical assets or guarantees. Moreover, these are not governed by any government regulation. The change in valuation of cryptocurrencies is based merely on speculation. This is why prices can witness sharp fluctuations. Cryptocurrencies have been found to be susceptible to market manipulation. Unless you have money that you can afford to lose, investment in cryptocurrency should be avoided. However, there are many people who consider cryptocurrency to be highly profitable. Ultimately, the choice is yours.
Your focus should be on creating a healthy investment portfolio. The old saying of not putting all your eggs in one basket is still relevant. You can allocate some money to all investment options. Assuming you have 100 bucks, you can invest 20 bucks in fixed deposits, 30 bucks in stocks, 20 bucks in mutual funds and 15 bucks each in gold and cryptocurrency. This is an ideal investment basket. You can adjust slightly, based on your specific needs and goals.
