Your Money

Smart Investment Alternatives for Beginners

Created on 05 Nov 2023

Wraps up in 7 Min

Read by 2.8k people

Updated on 31 Jan 2024

Investment Strategies

Investing is a powerful weapon for achieving your investment goals, even if you're not a financial whiz. In fact, it is essential for people with little or no financial knowledge. So, what if your non-financial intellect isn’t aware of the difference between a stock and a bond? You can still invest and achieve your financial goals. All you need is a little guidance and support; for that, Insider is here. ๐Ÿ˜Ž

And do you know what the best part is, my non-financial counterpart?

The alternatives or strategies I am discussing today are less risky, easy to understand & implement, and designed for people like you and me. By checking them out, you will realise that the authorities and government are also comprehending the difficulties we face and are thus providing us with due aid.   

However, I would like to give you a gentle reminder. The alternatives below are in no manner a recommendation, nor are we guaranteeing a good return. You are smart enough to know that there is no guarantee of any sort when it comes to the investing world. ๐Ÿ˜Œ

These investment strategies are more suitable for people who find investing difficult to apprehend and are thus still stuck in basic methods. If you are a pro with years of experience in investing, then you might agree with my choice. Or not! ๐Ÿค— After all, everyone’s wardrobe and portfolio looks different, right?

Now that we are both on the same page let’s find some cost-effective alternatives to help you achieve your goals faster.

Investment Alternatives for Non-Financial Investors

Without any suspense creation, I will jump directly to the upgrades. ๐Ÿค“

Alternative for Physical Gold: Sovereign Gold Bonds

Whether it’s Diwali, a wedding ceremony, an anniversary, or any other celebratory event, gifting gold has been our tradition since ancient times. Even now, our nation represents its earlier “golden bird” image in front of the world.
But now we are talking about upgrades. So, if you are also planning on buying gold jewellery or gold coins, then hold your horses and invest in digital gold instead.

There are a multitude of options available to buy gold in the digital form, like Gold ETF, Digital Gold, SGB, etc. However, SGB, short for Sovereign Gold Bond, is one of the good long-term alternatives.

I won’t waste your time with any more arguments. These facts ๐Ÿ‘‡ will speak for themselves:

SGB v/s Physical gold

See how buying digital gold is much more profitable today than your regular purchase of the bling? ๐Ÿช™

Check out the many SGB schemes available to choose from the best options out there. Read the article Sovereign Gold Bond Scheme: Benefits and Features for a better understanding.

Now that the most common investment option is covered, let’s jump on to the one with the maximum mystery. Let’s see the…

Alternative for Stocks: ETFs

High exchange costs, negative returns, complications of broking platforms, tax applications, and market volatility are some of the basic problems investors face on a daily basis. Which stock under which industry, at which position and for what duration should be the right choice is hard to apprehend. This confusion of the “right” makes investors lose thousands and lakhs of rupees trading or holding positions all the time.

But what if I tell you that you can solve most of the problems mentioned above with ease? All you have to do is exchange your habit of directly investing in stocks to ETFs. Exchange-traded funds present a basket of securities of varying market size and criteria from the stock market. This provides investors with a sort of screening option to pool their money in only the best stocks in the market.

Take Motilal Oswal’s Nifty 500 ETF, for example. This ETF is a collection of the best companies included in the Nifty 500 Index in terms of market capitalisation. Thus, you get fewer tracking errors, the backing of a good-performing index, and many more.

To give you a better understanding of how ETFs are a good idea than directly investing in stocks, here are some valid points:

  • ETFs provide a collection of stocks from diverse sectors with good growth potential. Diversity helps decrease risks.
  • Unlike individual portfolio management, ETFs don't need hand-holding for every buy and sell decision.
  • ETFs are cheap and operationally easy to manage as compared to stocks.

Told you, ETFs are easier to operate and much simpler in terms of stock analysis. Know more about them in the article What are Exchange-traded funds or ETFs?

Now, it’s time to look for an upgrade for the most conventional investment option.  

Alternative for Fixed Deposit: Mutual Funds

In twentieth-century movies and dramas, we often see scenes where parents break their long-time savings to help the protagonists out of a tough situation. Those savings were usually deposited in the form of Fixed Deposits, commonly known as FDs. Fixed Deposit was introduced in the early 1900s and could now be described as an outdated investment option.   

Sure, FD provides a decent interest rate (between 3%-7%), but it has its own limitations like low liquidity. Mutual Funds, on the other hand, offer a good interest rate and are the method of investment for modern times. Don’t believe me? I know it won’t be as easy to persuade you of the greatness Mutual Funds have when compared to FDs, but I am not one to give up so easily.
So, here โคต๏ธ is a representation of everything that will justify my argument:

FD vs Mutual Funds

Whatever your choice might be after going through the comparative chart above, learn more about the pros and cons of both options by reading the article FD vs Mutual Funds.

Now let’s get your retirement plans set and running with an…

Alternative for NPS: PPF

Public Provident Fund, aka PPF and National Pension Scheme, commonly called NPS, are both government-funded schemes. Still, the most significant difference is that NPS is specifically designed for retirement savings, whereas PPF is not.

And that’s the highlight of this particular upgrade. Why limit yourself to one prospect and keep your money locked in till you are old & grey when you have a short-term alternative? With PPF, you can generate a large corpus within 15 years of tenure, whereas NPS doesn’t allow withdrawal till you, in this case, the policyholder, are 60 years old. There are many more advantages of investing in PPF for a stable retirement. Check out a few of them here:๐Ÿ‘‡

Read the article NPS vs PPF: Which One is Better? and let me know your verdict. โœ๏ธ

Author’s Bonus Points

Now, it’s finally time for the article's highlight: a bonus tip from my side. Now, this alternative is not your traditional investment option. So, take it as a side-piece information for a purchase in demand all the time. Wondering what I am talking about? It’s the thing that lives all the time.

“Diamonds are forever!”. ๐Ÿ”ท

This is one of the biggest advertisement one-liners ever that turned the history of the diamond industry and took them to demanding heights from a near-collapsing stage. That’s true! Diamond makers and sellers utilised the strategy of resembling these sparkling jewels with never-ending love and are still making money on them. Check out the story of diamonds receiving their ultimate position as the queen of the gems by clicking here.

But let’s be honest. Diamonds are way too costly. So, what’s an alternative that’s cost-efficient, sparkling, and second-hardest to diamonds? I am talking about moissanite. Moissanite is more flashy, just as durable, and less expensive than diamonds. Plus, they don’t contain the tiny imperfections that diamonds receive while being shined to their blingy state by nature. They are perfect in clarity and brilliance.   

So, if you plan on proposing to the love of your life or wish to surprise your dear ones, invest in this cost-effective option and save the rest for other alternatives discussed above. Smart, right?

Were you aware there are some advanced investing strategies available for young investors, specifically students and graduates? Click on this link to get all the insights.

The Bottom Line

So, do you agree with my choices? If not, then which of the alternatives could have been better in the upgrades mentioned above? Let me know your inner thoughts in the comments section below, and we just might bring an article to support or debate your pointer. Till then, happy investing! ๐Ÿค—

*Disclaimer: The stocks and companies discussed above aren't a recommendation from Insider by Finology and shall not be construed as a replacement for professional advice. Consult a professional or conduct the necessary research before making investment decisions.

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Preeti Gupta

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A book-lover who adores everything fictional, Preeti has undertaken the life mission of tasting every flavour available in the pantry. A science student with a Master's in Mass Communication, she now wishes to conquer the Finance world as a writer. With the power invested by the randomly chosen music, she is here to make Finance fun for you.

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