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Community User Posted on 05:03pm 11-Oct-2019

What is an Investment?

Investing is a method of purchasing assets to gain profit in the form of reasonably predictable income (dividends, interest or rentals) and appreciation over the long term. Investing isn't gambling or speculation; it's about taking reasonable risks to reap steady rewards. The most common examples of investment could be Bank Fixed Deposit, Shares, Mutual funds etc.

 

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Why do we need to invest?

  
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ICICIdirect LearnHub

Community User Posted on 05:27pm 11-Oct-2019

Why do we need to invest?

Simply put, you should invest so that your money grows and shields you against rising inflation. The rate of return on investments should be higher than the rate of inflation, leaving you with a nice surplus over some time. Whether your money is invested in stocks, bonds, mutual funds, or fixed deposit (FD), the result is to create wealth for financial goals like retirement, children marriage, college fees, vacations, better standard of living or just pass on the money to the next generation. Also, it's exciting to review your investment returns and to see how they are accumulating at a faster rate than your salary.

 

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What is an Investment?

What are the different Investment Avenues available to investors?

 

  
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ICICIdirect LearnHub

Community User Posted on 05:34pm 11-Oct-2019

What are the different Investment Avenues available to investors?

 There are many types of investments in the market. But all investment instruments are broadly based on the following four basic investment areas or assets classes:
 • Equity Markets
 • Debt Markets
 • Real Estate, &
 • Gold

 

Equity investments include direct investment in shares, equity mutual funds, etc.

Debt investment includes investment in bonds, debentures, debt mutual funds, etc.

Real estate investment could be in residential or commercial properties.

Gold Investment could be in Gold ETF or Sovereign Gold bond.
 

You can invest in various asset classes on ICICIdirect.com by logging into your account. If you don't have an account with us, you can Click Here to open an account with ICICIdirect.

 

 

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Why do we need to invest?

What is an Equity Investment?

ICICIdirect LearnHub

Community User Posted on 06:14pm 11-Oct-2019

What is an Equity Investment?

Equity investments mean to purchase stake in a company and become a partial owner of that company. 

Equity represents their respective ownership interests in that business. Business owners can raise capital by selling their equity or ownership interests in the business to other investors.

Investors buying the ownership interest (or equity) of a business, enjoy the gains and losses of the business activities and are known as shareholders. 

For example, if you purchase the shares of Reliance Industries, that means you become a shareholder and partial owner of Reliance Industries.

 

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What are the different Investment Avenues available to investors?

Why do we need to invest in equities?

 

ICICIdirect LearnHub

Community User Posted on 06:20pm 11-Oct-2019

Why do we need to invest in equities?

Basis historical data, Equity has demonstrated the potential to outperform the return of some other asset classes like Gold, Debt, Real Estate, etc. It is more likely to help an individual to achieve their financial goals and beat inflation and taxes in a longer period. If a person invests entirely in conservative investment avenues like deposits, it may be difficult to protect your wealth from inflation and taxes.

Let's understand this with an example:

Assuming a fixed deposit offering you a return of 8% and the tax rate is 30 %, then your post-tax return in your hand is 8*(1-0.3)= 5.6%. If we assume equity post-tax return as 10% p.a., then after 20 years, the value of the Rs. 1 lacs in FD investment would be Rs. 2.97 lacs, while equity investment value would be Rs. 6.73 lacs, which is more than double of FD Investment.  

 

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What is an Equity Investment?

How much return should an investor expect from equity investments?