features of investment programme
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What are the features of investment avenues ?
Before investing , any investor would like to know the features of his potential investment. If these features are consistent with his objectives and preference then he/she will invest in such types of securities. Because such investment is able to offer him optimum facilities and advantages as far as what he wants. Let’s dig out the answer for the question of What are the features of an investment program?
The investors generally considered the
following features on the way of their investment.
-
Safety
- Regularity and Stability of income
-
Liquidity
- Capital appreciation
- Stability of purchasing power
- Legality
- Tax advantages
- Secretly invested securities
- Tangible Security
- Time Period
1). Safety:- Everybody is interested in providing safety to his principal invested amount. So before the investment he/she would like to analyse or review the general economy and industry trends of business. For the purpose of minimising risks and ensuring safety of principal investing amounts, the investor would like to diversify his investment across the portfolio. Diversification may be geographical to avoid damages due to natural calamities. Diversification can also be according to bonds and shares, as well as according to dividend or interest income etc. Because an appropriate diversity of investing reduces the risks. Thus, all over decisions concerned with the investment are taken carefully to provide safety to the invested principal amount.
2). Regularity and stable income:- A stable rate of income over the investment is required for investment programmes. However, Stability of income provides capital growth. Because all investors are interested in regular income over their investment. It’s also a feature of investment. features of investment programme
3). Liquidity:- A liquid investment is that which can be converted into cash immediately. It’s a prominent feature of investment. This feature of investment is able to fulfil the needs of investors. So every investor mostly keeps his total investment in the form of readily saleable securities. features of investment programme
Thus they keep a portion of their investment in the fixed deposits and readily into marketable securities. For example as Shares, bonds, govt Securities and mutual funds give liquidity. Whereas, like insurance policy, real estate, pension fund and fixed time securities etc cannot ensure immediate liquidity. features of investment programme
4). Capital Appreciation:- Nowadays capital appreciation is considered also important features of investment in such volatile markets. The investors try to invest in such securities, the forecast of whose securities will appreciate in future. But it’s difficult to forecast future appreciation for securities. Which is done throughout in a systematic way and not on the basis of speculation or gambling.
5). Stability of Purchasing Power:- All rational investors know that the value of their money is declining day by day by the extent of the rise in prices. So investors are aware about the investment returns over their investment which is matched against any purchasing power instability into the future. So if investment cannot earn as much as rise in prices or inflation, then the rate of return will be negative on the investment. features of investment programme
6). Legality:- Legal aspects may pose many problems on the way of investment for the investors. Investors have to be aware of the various legal provisions relating to the purchase of investments. Thus, the most reliable and safest way is to invest in the securities issued by the UTI, The LIC and The post office National saving Certificates. These securities are considered as legal beyond doubt. Such investment helps investors in avoiding many problems. features of investment programme
7). Tax Advantages:- Tax planning is also considered during the investment policy. Because every investment can be influenced by the tax aspect. Every investor tries to light the burden of tax on his earnings throughout the investment. As real returns are returns after taxes. Because the burden of tax on some investments is more whereas some investments are tax free. The investors must make a plan about their investments in such a way that the tax liability is minimum. features of investment programme
8). Secretly Invested Securities:- Sometimes investors are interested to invest in securities which can be concealed and leave no record of income received from them. Such concealing is required on the way of investment to be safe from social issues, unacceptable levels of taxation. So some investors invest in Gems, precious stones etc. Because its highest values are always attractive and appreciable along with small bulk and are readily transferable. However, it’s not legal but it is still done by the majority of investors. features of investment programme
9). Tangible Securities:- Most investors are interested in investing in tangible securities like land, machinery, vehicle and building. Whether such a type of investment does not yield an income, but the only satisfaction is the pride considered for possession of such goods. This pride is a feature of such intangible goods investment like the other securities. features of investment programme
10). Time Period:- Every investment contains a time period. For example:- Equity shares hold for a long period as compared to the preference and redeemable debentures in the investments. Besides FD and Saving Account their return also depends upon the time period. Some investors would like to hold investment for a long period and whereas some investors want to return as soon as possible on their investment within a short period. What are the features of an investment program?
Conclusion:- Investment has many features which are discussed above. Because the above discussed features influenced the investment structure by its return. During the investment planning every investor has to think about these features then he/she can invest. After the analysis these features of investment investors can reach the appropriate plan for best choice investment. features of investment programme
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Note:- All investors can invest in a good plan of investment after reading the above discussed features of investment. However, they can help fund managers who are experienced. Investors must know the legal policy of SEBI before investing.
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