India’s post-pandemic investing culture has ushered in a new generation that values financial management and takes investments seriously. However, navigating the vast capital market brimming with opportunities can be daunting and confusing, especially for beginners seeking to achieve their financial goals. So, how should one approach investing in such a complex landscape? Experts often advise starting with modest capital and opting for less risky investment choices such as mutual funds and bonds.
These options offer risk management while providing potential returns to grow your capital. In this article, we explore the fundamentals of both mutual funds and bonds, comparing their features to help you make an informed decision about where to invest your hard-earned money. Let’s explore these investment avenues in-depth to find the most viable option that aligns with your financial objectives.
Understanding Bonds
Bonds serve as investment instruments designed to support governments or companies in raising funds for their projects and initiatives. They can be likened to loans provided by investors to these entities. Unlike owning shares or direct investments in a company, bondholders receive interest payments as a return on their investment. Bonds are considered fixed-income investments, offering consistent returns to investors. When a bond is purchased, the investor essentially lends money to the issuing entity, and in return, the issuer commits to paying regular interest on the borrowed funds.
Investment Horizon
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