About the Investment Options Research Paper Example | Topics and Well Written Essays - 2250 words

About the Investment Options - Research Paper Example Mutual Fund is a professionally managed pool of assets. Assets are collected from many investors. It is then invested in equities, bonds, money market instruments and other investment options. Mutual funds are open-ended or closed-ended investment options. The option to pull back the investment amount anytime is available with the investors. The number of units to be allotted for any individuals depends upon the amount of investment and the prevailing NAV of the company in the market. Suppose,  £500 is invested and the present NAV of the company is  £5. The number of allotted units to the investor will be (500/5  £) 100. The investor has to pay a nominal fee for their investments. Mutual funds are professionally managed, so the chances of losing money are also minimal than investing directly in shares. The diversified nature of mutual funds also keeps the risk level within the nominal range. Due to diversification, less return from one company or sector gets easily nullified by the higher return by other company/sector. Gold is possibly the most invested metals around the world. It is also the universally accepted medium of exchange. In accounting prospect, the depreciation value of gold is almost zero. Gold is also believed to be worked as an inflation hedge. In most of the times, gold has a negative correlation with the performance of the share market. This is why people prefer gold as their investment option when the equity market is underperforming. Fixed term bonds are the means of getting a fixed interest amount after a specific period of time. Fixed term bonds have the maturities ranging from 6 months to 5 years. It may vary depending upon the need of the corporate and also upon the market condition. These bonds are issued by corporate bodies. There lays a default risk embedded with this kind of bonds.  Ã‚