INVESTMENT

STOCKS

A buyer of a company's stock becomes a fractional owner of that company. Owners of a company's stock are known as its shareholders. They can participate in its growth and success through appreciation in the stock price and regular dividends paid out of the company's profits.

BONDS

Bonds are debt obligations of entities, such as governments, municipalities, and corporations. Buying a bond implies that you hold a share of an entity's debt and are entitled to receive periodic interest payments and the return of the bond's face value when it matures.

Bank fixed deposits (FDs) are among the safest investment options available to investors. They are offered by banks and other NBFCs and allow investors to park their idle cash for a specific duration and for a fixed rate of interest. The interest rate is predecided and unaffected by market fluctuations, which ensures greater safety of the investments. From the ease of flexibility to various options offered to an investor, fixed deposits are a boon to risk-averse investors.

FIXED DEPOSITS

MUTUAL FUND

Bank fixed deposits (FDs) are among the safest investment options available to investors. They are offered by banks and other NBFCs and allow investors to park their idle cash for a specific duration and for a fixed rate of interest. The interest rate is predecided and unaffected by market fluctuations, which ensures greater safety of the investments. From the ease of flexibility to various options offered to an investor, fixed deposits are a boon to risk-averse investors.

RETIREMENT PLANNING

Saving for retirement as well as managing that income once you retire are two of the most critical aspects of financial planning. There are several types of retirement plans available to investors. Some of the most common investment options for retirement planning are Senior Citizens Savings Scheme (SCSS), National Pension System (NPS), Public Provident Fund (PPF), bank fixed deposits, etc. An investor looking to save for retirement might consider opting for safer investment avenues if they are nearing their retirement.

What Is Investing?

Investing, broadly, is putting money to work for a period of time in some sort of project or undertaking to generate positive returns (i.e., profits that exceed the amount of the initial investment). It is the act of allocating resources, usually capital (i.e., money), with the expectation of generating an income, profit, or gains.

One can invest in many types of endeavors (either directly or indirectly), such as using money to start a business or in assets such as real estate in hopes of generating rental income and/or reselling it later at a higher price.

Investing also differs from speculation, as evidenced by the investor's timeframe. Speculators are typically looking to gain from short-term price fluctuations that occur in weeks, days, or even minutes. Investors usually consider that a greater period of time, like months or years, is needed to generate acceptable returns.

Understanding Investing

Investing is to grow one's money over time. The core premise of investing is the expectation of a positive return in the form of income or price appreciation with statistical significance. The spectrum of assets in which one can invest and earn a return is vast.

Risk and return go hand-in-hand in investing; low risk generally means low expected returns, while higher returns are usually accompanied by higher risk. At the low-risk end of the spectrum are basic investments such as Certificates of Deposit (CDs); bonds or fixed-income instruments are higher up on the risk scale, while stocks or equities are regarded as riskier.

How to Invest

Do-It-Yourself Investing

The question of "how to invest" boils down to whether you are a do-it-yourself (DIY) kind of investor or would prefer to have your money managed by a professional. Many investors who prefer to manage their money themselves have accounts at discount or online brokerages because of their low commissions and the ease of executing trades on their platforms.

DIY investing is sometimes called self-directed investing, and requires a fair amount of education, skill, time commitment, and the ability to control one's emotions. If these attributes do not describe you well, it may be smarter to let a professional help manage your investments.

Professionally-Managed Investing

Investors who prefer professional money management generally have wealth managers looking after their investments. Wealth managers usually charge their clients a percentage of assets under management (AUM) as their fees.

While professional money management is more expensive than managing money by oneself, such investors don't mind paying for the convenience of delegating research, investment decision-making, and trading to an expert.

History of Investing

While the concept of investing has been around for millennia, investing in its present form can find its roots in the period between the 17th and 18th centuries when the development of the first public markets connected investors with investment opportunities. The Amsterdam Stock Exchange was established in 1602, and the New York Stock Exchange (NYSE) in 1792.

Trading of securities in India dates to the 18th century when the East India Company began trading in loan securities. 1830s: During this decade, corporate shares started being traded in Mumbai. Most notably, stocks of banks and cotton presses were traded during this time.

1) The Bombay Stock Exchange (BSE) was established in 1875 under a banyan tree in Mumbai, making it the oldest stock exchange in Asia.

2) The National Stock Exchange (NSE) was established in 1992 to provide a modern, automated trading system across India.

National Stock Exchange was incorporated in the year 1993 to bring about transparency in the Indian equity markets. NSE was set up at the behest of the Government of India, based on the recommendations laid out by the Pherwani committee in 1991 and the blueprint was prepared by a team of five members (Ravi Narain, Raghavan Puthran, K Kumar, Chitra Sankaran and Ashishkumar Chauhan) along with R H Patil and SS Nadkarni who were deputed by IDBI in 1992. Instead of trading memberships being confined to a group of brokers, NSE ensured that anyone who was qualified, experienced, and met the minimum financial requirements was allowed to trade.

NSE commenced operations on 30 June 1993 starting with the wholesale debt market (WDM) segment and equities segment on 3 November 1994 . It was the first exchange in India to introduce an electronic trading facility. Within one year of the start of its operations, the daily turnover on NSE exceeded that of the BSE.

Operations in the derivatives segment commenced on 12 June 2000. In August 2008, NSE introduced currency derivatives.