Are you looking for some high return investments in India? Your search probably ends here. We’ll be highlighting the trending and the best high return investment list in India, few alternatives that any investor would like to explore.
High Return Investment: Meaning & Importance
As the term itself reflects, a high return investment is one that can fetch you high returns either in a short period or in the long-run.
When it comes to investing, there are a plethora of financial products one can choose from depending on the person’s profile, stage of life, and risk appetite.
A conservative Indian investor often looks for less risky products such as Government schemes like PPF ( Public provident fund), EPF (Employee provident fund), NPS (National Pension Scheme), etc. These are considered secure avenues for investment as they are backed by the Government. Additionally, people also tend to opt for banking schemes like Fixed deposit and Recurring Deposits on a small interest rate.
However, low risk amounts to low returns. The riskier you can play, the better returns you can generate in the capital market. More and more people are understanding this now and are willing to create wealth in the market using high return yielding products. The Indian mindset is rapidly changing with the millennial generation getting more inclined towards investing at a young age.
So, let’s reveal the list of popular high return investments in India, that no doubt are riskier, but could be your way to earn bigger.
High Return Investments in India: 6 Best Options to Know
Let’s have a look at some such high return generating investments for those with risk appetite and proper knowledge and understanding of the market.
1. Direct Equity
Investment in direct equity implies buying and selling of stocks according to market behavior or as we commonly know it, ‘Trading’. Traders perform a thorough research of the stocks which includes fundamental analysis and technical analysis. But don’t worry, many websites offer such insights from a lay man’s perspective to help you make better trading choices. To invest in direct equity, the first thing you need to do is contact a stock broker and open a Demat and trading account. And, the process is really quick and can be completed online. That’s the primary step towards initiating your trading activities.
However, such investments are purely dependent on first, the company behavior, and second, the market fluctuations. That is why they are considered very risky as well.
Remember, you should not invest your emergency fund in Direct equity. You can also opt for Equity-linked schemes which have comparably lesser risk and are suitable for staying invested in equity for a longer period.
Important: Equity markets are subject to huge risks. So, do thorough research and follow due diligence before putting your money in any risky asset class.
2. Mutual Funds
Mutual Funds is a pool of capital assets like Direct equity shares, Debt, government bonds etc. Investors, both retail and institutional can invest in such funds for a diversified portfolio and to mitigate some level of risk. There are different types of Mutual Funds from which you can choose according to your needs and goals.
For instance a Hybrid fund is a balance of Equity and debt and is suitable for people with high to moderate risk appetite.
3. Real Estate
Buying properties is also a profitable investment avenue. Like stocks generate dividend income, real estate generates rental income. Once rented, properties payout for decades. They also significantly grow in value over the years.
The drawback of this option, however, is a one-time huge investment thus making it an option not easily available. Additionally, real estate is also a risky avenue as it faces the threat of natural disasters, accidental incidents, or any other unforeseen events.
4. Hedge Funds
This is a pool of fund collected from individuals or institutions that invests in high risk investment products such as Futures, Options, currencies, real estate etc. These funds offer a very high rate of return.
Hedge funds mitigate the risk factor by sharing the risk among people who have made the pool and through diversification of the portfolio. For instance if you invest in a single high-risk-high-return product the chances of loss are more compared to investing in hedge funds as they are investing your money in different products. So, even if one product fails to perform, the high return offered by the other compensates and the portfolio is balanced.
Investment in commodities includes soft commodities like wheat, sugar, rice, hard commodities like Natural gas, Crude or metals like gold, silver, copper and aluminium. The returns on such trading entirely depends on the price fluctuations of commodities in the market. They are also subject to inflation. Investing in commodities offers a high rate of return.
Commodity trading often comes bundled with high risk as well as high returns. So, you need to be careful while investing your hard earned money in commodities.
6. Venture Capital
Investment in venture capital implies investing your money into a start up with the potential of long term growth. When you invest in this avenue, you are termed as a venture capitalist. But, this can be your best alternative only if you are rich enough and have surplus funds to invest in the growth of a start-up. So, this seems to be a viable investment option for big businessmen, established entrepreneurs with ample money.
When you provide funding for a new business, the borrowing party compensates you in different ways like giving a share in the business, returns on profits earned, or can assign you an authoritative designation in the company, depending on the terms and conditions of the funding. The risk factor in this case is the start-up not able to perform, going bankrupt or cases of fraud.
Why Look for Alternative Investment Options?
Alternative Investment options are beneficial if you are looking to diversify your portfolio. Adding some variety with traditional products stabilizes the risk factor and generates a balanced return on investment.
Diversification is of ardent importance when it comes to investment. In fact, the first rule of investment – “never put all your eggs in one basket” applies well here. This implies that even if one product fails to deliver the expected returns, another product in your portfolio may compensate for it.
Contrary to the popular belief, high risk alternative investment avenues are not limited to HNI and UHNI clients. Anyone with a medium to high risk appetite can invest in these investing options.
High Return Investment in India: Where to Invest?
Traditionally, people tend to avoid high risk investment products due to fear of loss of capital. However, there are several ways to mitigate risk involved in every product. The younger generation is showing more interest in varied investment options and exploring their financial journey. Stock trading and risk taking go hand in hand, but millennials are getting attracted towards it. Even trading in international market is gaining much traction these days.
However, the most important thing to keep in mind is to access your risk appetite before considering any risky and high return products. And yes, never put your emergency funds in high risk products. The key is to play both safe and smart.
Do your in-depth research, find out what is best for your financial health and take actions accordingly.
Did you find that informative? What high risk-high return investment product do you plan on investing in? Let us know in the comments below!
2 thoughts on “High Return Investments in India: 6 Best Investment Options 2023”
Hedge funds may not be a suitable investment for the majority of people. It only has limited gain potential.
Such a useful article. Through this, knowledge regarding the investment is given to us. So that we will invest in that investment where we will get high returns and this will definitely help the investors to get a high return on the investments.