• Stock market investments or Equity which also include mutual funds
• Fixed deposits or Debt and government bonds
• Gold, precious metals, and Diamonds
• Real estate
• Antiques and Art

They can be instruments of financial assets or physical assets.

Equity

Compared to various classes of assets, investment in equities is the riskiest while at the same time more rewarding. All over the world, including India, stocks have outperformed every other asset class in the long run. An investment of just Rs.10,000 in companies like Infosys, Eicher Motors, or Wipro in the 1980s would have grown many times over by now. As you are part owner of that company, you participate in the overall growth opportunities of the company. As equities are risky investments, one cannot put all your money into equities.

Debt

Debt schemes are popular as it carries less risk, and you are assured of a definite income every year which are predictable.

Fixed deposits with banks, debt mutual funds, and government schemes that have a fixed rate of interest are Debt instruments. Debt instruments are not entirely risk-free and they also carry risk. Governments are also known to default on repayment. Inflation is another serious risk. While it is essential to have the part amount of money invested in debt for maintaining stability to your investments, investing your entire money in debt is not a good idea.

Gold

Having some gold in your portfolio is a must for every investor as this will diversify and reduce the risk of volatility in his portfolio and also bring about consistency. In India, gold is the most liquid investment. While gold can be converted to cash almost instantly across the counter, fixed deposits, NSC, etc. may take two or more days to convert into cash.

Real estate

Investments in Real Estate gives high returns and the risk is comparatively low. It is for those people with huge surplus funds. Higher risk-adjusted returns assured regular income and definite capital appreciation are the benefits of investing in Real Estate. One has to be cautious at a time when real estate prices are at its peak and getting expected returns may turn out to be quite tricky. The income from this investment depends on whether the property is located in a residential area or commercial area or whether it a vacant site that can be used for warehouses or for setting up industries. On the negative side, real estate investments are considered to be one of the most illiquid of investments because it may take at least 5 to 6 months to convert it to cash.

Arts & Antiques

Investments in Arts and Antiques are slowly catching up in our country. It was not considered as investments earlier but now, works of the great artist are sold for millions. Art is slowly evolving into the next big asset class. To invest in this type of asset, a thorough knowledge of the subject is needed and also one must make a study on the artists who have the potential to turn into high-profile artists in the future. Investing in this type of asset has its negative side. First and foremost one cannot sell a piece of art just as we may sell any other asset.

CONCLUSION

As Equities, debt instruments, and gold are three categories of investments that are well regulated by the government and are within the reach of anyone, you can invest part of your savings in these three categories. Real estates are comparatively big investments and require higher investment. As art and antiques are not regulated, they are risky investments. A balanced portfolio that includes equities, debt instruments, Gold, and also real estate, with a proper investment plan, is what is needed to create wealth.