What does "Safe" mean to you?

There are different connotations of the concept of “safe investments” as per different investors. For some, safe means guaranteed returns, for others it may mean principal preservation while for some, it may mean aggressive growth irrespective of market conditions.

A safe investment doesn't only depend of the product you choose, rather it also depends on your understanding from the time you pick your product which includes understanding your own risk profile, time horizon, financial needs and purpose of investment.

The most secure product considered by our elders was Fixed or recurring deposits, because they are managed by the banks which are regulated entities. The logic was simple: banks are supposed to have a huge deposits with them so could almost guarantee return on investments.

With the development of investment products, we have attractive choices among Mutual funds, some of which can give more attractive returns than conventional deposits. The value proposition of Mutual funds is the minimization of risk, even though the returns may not be guaranteed. Since Mutual funds are managed by professionals and experts, anyone with minimal investment knowledge can also invest in such funds. The risk is also reduced with diversification, as Mutual funds invest in a portfolio which is a combination of securities, rather than betting on single stock or bond, so the risk is divided among various securities. You can timely review the performance of your Mutual fund so as to switch you investments as and when needed.

You must have heard or read about Mutual funds being subject to market risks, so please read all scheme related documents before investing. This holds true not only for Mutual funds, but also for any product that you may want to invest in. It is really important that you understand the product's risk, where it invests, and the performance of the Asset Management