Most people tend to think of the
best way of investing
as just being that one single investment plan which would serve all their needs and purposes. However, the truth is far from it. In fact, the best investment scheme is the one which consists of a number of investments of different risk types.
What is the risk in an investment scheme?
Any investment which you make irrespective of its nature and amount will always have certain risks attached to it, one of the biggest of which includes the fact that you may actually lose out the money which you have invested.
For this reason, I categorize investment plans into two categories - those that are linked to the market conditions such as ULIPs, mutual funds, shares, etc. and those that are not linked to the market conditions such as fixed deposits, provident fund, etc.
The former category provides great returns but being linked to the market conditions means that you may lose out the money which you have invested. On the other hand, those investment plans which are not market linked provide modest returns but those returns are assured.
Thus, your investment plan should consist of schemes from both these categories so that you get the maximum returns.
I hope this helps.