How and in which schemes to invest so that I will have less risk and more return

If you’re looking for the "safest" investment option, Bonds are your go-to. But they don’t yield enough. In fact, inflation eventually catches up with the returns and you end up with virtually no profit.

(Courtesy: Investing in Bond Europe)

The stock market is great for good, desired returns. BUT it involves high risk.

In India, there are a handful of other schemes to invest in. Like National Pension System, Public Provident Fund andBank Fixed Deposit. However, again, although safe, the returns aren’t as great when adjusted for inflation. (This, by the way, is no reason why you shouldn’t invest in safe retirement plans.)

Of course, Gold is another option. Millions of households in India still invest (or desire to invest) in Gold. But the asset isn’t a good investment option. Read this wonderful article on The Economic Times to know more on this-- Gold: Why Gold is a Dead Investment.

(Courtesy: WSJ)

Coming to real estate… I personally believe they are one of the best investment options today; in India, in particular, when the promises of development and urbanization are high. Although the housing market is experiencing one of its longest stretches of boom and that the market will tank imminently, it still remains a go-to option in the long run. If you can get a good property and hold it for at least 10 years, it promises you dream-like returns.

But I get it: the small investors can't spare such a big capital to invest in real estate. So, there are financial limitations for retail investors here.

(Courtesy: MoneyMindz)

All these leave us with mutual funds. Kept aside all the critics and naysayers, mutual funds remain a decent investment option. It is much rewarding than bonds and less-risky than shares. In fact, mutual funds almost always guarantee you profit in the long-run. Now, there exist many different types of funds, from equity to index to SIP. Which one of these are good for you largely depends on your own needs, requirements, and goals. This is where consulting a professional can be the right choice.

So, to answer your question, here are my two-cent:

• Invest in real estate, if you have the capital.

• Mutual Funds should be your first option.

• Next, move to share market when you have enough money that you can risk losing.

• ALWAYS, ALWAYS invest for long-term. Trading or flipping might be the new investment sexy. But they are extremely risky and require you to be savvy.

Hopefully, the answer helps!