There are several cases where investors want to invest for one year. Choosing the perfect investment options for wealth management is an area of concern for people from all income groups.
Accumulating money is essential for financial security. It does not make sense that you just rely on savings only. You should go for the top ten investment options for one year if you want to invest only one year. Investments are generally synonymous with the stock market or equity money, but it is partly true. Besides these, some of the best investment options include fixed deposit, ULIP plans, and other government bonds.
1) Mutual funds
One thing that you would completely agree with is the fact that Mutual Funds are subject to market risk and you should consider your risk taking appetite before you invest in a mutual fund. Mutual Funds are your best bet if you completely understand the risks associated with the market.
You can easily create an investment portfolio depending on your preferences whether you are just going for short-term investment or long term investment goals.
2) Direct Equity
If you are looking for a short-term investment, like one year, then one of the first things you should consider is investing in direct equity. It is all about equity shares of a company that binds you in the legal terms related to the company’s ownership. By buying the shares of the company, you also get the right to get involved in the company meetings and have your say on the decisions in the company.
Being an investor, you will know how the company is performing and how it impacts the share price. Depending on your risk taking appetite and other market conditions you can use tools to sell the shares to a third party or you can also give them back to the company.
3) Post office savings
There are deposit avenues for investors where the National Post chain controls everything. The investment option helps people to inculcate the habit of disciplined savings in life while also providing great investment avenues to build good financial planning.
The scheme is one of the best options because it is straightforward to apply for.
4) Fixed maturity plans
The fixed maturity plan falls under the category of close and detects mutual funds. The best part about investing in this portfolio is that it features different instruments that promise constant earning. They are also wearing maturities. The fixed maturity plans have a maturity term that is anywhere between 1 month and goes up to 5 years.
The major objective of the fund is to offer fixed returns over a quick maturity term and it prevents you from market fluctuations as securities would be held till the term ends. Furthermore, the change in interest volatility does not pose any risk here.
5) Arbitrage mutual fund
These funds require the use of money on the arbitrage possibilities. Basically, they are open-ended funds. So you need to maintain them for at least one year to get the tax gain available for equity funds.
So the returns from arbitrage finances Sothe returns are around 6% consistent per annum.
6) Liquid funds
Liquid funds are debt mutual funds which are highly open-ended income schemes that invest in the short-term fixed interest generating money market instrument.
By investing in liquid funds, you can benefit from the high liquidity with complete access to the money besides attractive returns. It is one of the best ways to park surplus cash in liquid funds.
7) Short-term and ultra-short-term funds
These are also debt mutual funds with an extended maturity term ranging from 90 days to three years. These funds protect the investment against the reduction in the interest rate due to comparatively long tenure.
As a result, they are more stable as they charge and exit load. As a result, returns on short-term debt funds are attractive.
8) Floater fund
A Float fund is a debt fund that invests 65% of the total assets in the floating rate instrument, and it can be anything from corporate bonds to debt instruments. The floater funds do not have any fixed coupon rate. The NAV would reflect the change, allowing the investors to earn optimum returns.
Floater funds have a credit risk attached to them as there can be default payment of underlying security.
Gold is also one of the best investments if you’re looking forward to investing only for one year. There are three ways you can invest in gold: the physical form exchange rate fund and ovarian gold bonds.
Gold prices increased twice in three years after the 2008 financial crisis and have risen almost 3 1/2 times since then. It is because after the world’s economy collapsed, investors started to take protection in gold.
10) Post office time deposit
You can open a post office time deposit for one year at any post office near you. Just like your fixed deposit, the government ultimately secures and guarantees them. They have a one-year lock-in, but you can always pledge the deposits in emergencies and raise at least 75% of the fund value.
They are backed by the government, so they simultaneously attract young investors and senior citizens.
These investments are perfect for one year and are also known as marketable assets. This is because they can be easily transformed into cash when needed. In the short term, investors mainly look for a time horizon of one year but can also extend to three or five years in some contexts. If you look forward to investing for the short term, the primary purpose should be liquidity and optimum safety, and you should always look for a way to exit the investment as soon as possible with a minor penalty.
Above all, whenever you are investing in these funds you should always consider your risk appetite so that you can make the most of your investment decision. you should identify your goals to start your investment journey and then consider the level of risk that you would like to take.