Most investors want to make investments in such a way that they get sky-high returns as fast as possible without the risk of losing the principal money. This is the reason why many investors are always on the lookout for top investment plans where they can double their money in few months or years with little or no risk.
However, it is a fact that investment products that give high returns with low risk do not exist. In reality, risk and returns are directly related, i.e., higher the returns, higher is the risk, and vice versa.
So, while selecting an investment avenue, you have to match your own risk profile with the risks associated with the product before investing. There are some investments that carry high risk but have the potential to generate high inflation-adjusted returns than other asset class in the long term while some investments come with low-risk and therefore lower returns.
There are two buckets that investment products fall into – financial and non-financial assets. Financial assets can be divided into market-linked products (like stocks and mutual funds) and fixed income products (like Public Provident Fund, bank fixed deposits). Non-financial assets – most Indians invest via this mode – are the likes of gold and real estate.