People have come a long way in figuring out varied means to increase their earnings over time. Instead of burying our savings underground or hiding them in a secret compartment, we prefer the alternatives. With the progress of technology, money making has undergone a transformation.
With the coming of the stock market, there have been multiple schemes aimed at increasing the cash flow of a person. Many people build their income in the trading of shares. But the stock market comes with a number of risks. While some people openly accept these, others look for ways to by pass these while gaining its benefits.
Recently, investment in real estate and mutual funds, among a few others, have proven to be the safer options. But none of these comes without a counter perspective. For example, mutual funds derive their value from the market. As a result, their net value fluctuates daily. Although they are seen as relatively stable, their future in India appears a bit cloudy. Balanced funds are a kind of mutual fund. They are said to be the more stable of the lot.
The money invested in these schemes is usually used to buy common stock, preferred stock, bonds and short term bonds. Such is their management that it would help the investor with an income as well as a rise in the capital along with reduced risks. Due to their balanced nature and diversified holdings, they are more stable during times of economic recession. They are therefore able to sustain an economic recession without much of a loss.
With the current inflation, it is important to keep multiple sources of income. Money will always prove useful, and with the rising prices,one never knows how soon! Balanced funds are a way of increasing this money without having to deal with the risks of the market.
But nothing in life comes perfect. Although these funds seem to be the ideal investment strategy, there is one flipside. Due to their diversified nature, they will accumulate far less money as opposed to all stock funds in a bull market.
But with that in mind, the perfect strategy of investment would include both, balanced, as well as all stock funds. This would allow for at least one low risk source of income. In doing so, investing a vast portion of the money into all stock funds would not be a good idea. Although they offer fantastic returns, they dont offer the reduced risk factor. With a downward turn of the market, it is possible that one would lose all the money as well. Hence, a good investment would be a smart investment. A proper blend of risk and safety.
With the coming of the stock market, there have been multiple schemes aimed at increasing the cash flow of a person. Many people build their income in the trading of shares. But the stock market comes with a number of risks. While some people openly accept these, others look for ways to by pass these while gaining its benefits.
Recently, investment in real estate and mutual funds, among a few others, have proven to be the safer options. But none of these comes without a counter perspective. For example, mutual funds derive their value from the market. As a result, their net value fluctuates daily. Although they are seen as relatively stable, their future in India appears a bit cloudy. Balanced funds are a kind of mutual fund. They are said to be the more stable of the lot.
The money invested in these schemes is usually used to buy common stock, preferred stock, bonds and short term bonds. Such is their management that it would help the investor with an income as well as a rise in the capital along with reduced risks. Due to their balanced nature and diversified holdings, they are more stable during times of economic recession. They are therefore able to sustain an economic recession without much of a loss.
With the current inflation, it is important to keep multiple sources of income. Money will always prove useful, and with the rising prices,one never knows how soon! Balanced funds are a way of increasing this money without having to deal with the risks of the market.
But nothing in life comes perfect. Although these funds seem to be the ideal investment strategy, there is one flipside. Due to their diversified nature, they will accumulate far less money as opposed to all stock funds in a bull market.
But with that in mind, the perfect strategy of investment would include both, balanced, as well as all stock funds. This would allow for at least one low risk source of income. In doing so, investing a vast portion of the money into all stock funds would not be a good idea. Although they offer fantastic returns, they dont offer the reduced risk factor. With a downward turn of the market, it is possible that one would lose all the money as well. Hence, a good investment would be a smart investment. A proper blend of risk and safety.
SHARE
