Before you make an investment decision, you would knowingly or unknowingly run the following questions in your mind:
- Will my money be safe?
- Will I get my money back when I need it?
- What return will I earn from it?
These questions are about the 3 essential elements of investments – Safety, Liquidity and Returns.
Let’s see what are you most likely to do if you were to focus on just one of the elements.
What is the safest investment? You would typically invest in a PPF, NSC, Government Securities/Bonds, Bank Fixed Deposits, etc.
What is the most liquid? Well, cash in the locker, money under the mattress or your savings/ current account are the likely places.
What will give the highest or best return? Now, that’s where the conflict begins. Will this be the one with highest safety and liquidity?