Best Investment Options in India for Beginners & Professionals in 2024

You choose various investment options like Equity, Debt, Diamonds, Gold, Silver, Real Estate, Commodities, Antiques, Paintings, Carbon Credits, Forex, Derivatives, etc.

You must invest your money wisely so your assets grow and generate good returns well above the inflation rate. So, ‘Which one was the best investment option in India in 2024?’ is a common question that will come to your mind.

11 Best Investment Options in India

So, let us go through various investment plans and options in India and find out which one is best. We peep into the different assets' heart and soul to find the best one.

1. Invest in Debt

It is the safest investment option, and preferred debt instruments are FDs of Nationalized Banks, Post Offices, Government Bonds, etc.

Let us see how they operate, function, pay the interest regularly, and return our principles in time. They borrow from us at low rates and lend higher rates to small and big businesses, corporations, and development projects.

Most of these borrowers, entrepreneurs, and companies perform well, pay interest, repay loans-principals to banks, and still profit for themselves. That is why all Nationalized Banks, Post Offices, Pay us Interest Regularly repay our principals without fail and still profit.

Our so-called Safest Investment Income-Interest, paid by Nationalized Banks, Post Offices, is thus created by these borrowers, companies, and entrepreneurs, who fulfill humanity's social, economic, technical, and practical needs efficiently and effectively.

Thus, wealth is created by some entrepreneurship only which adds value for the betterment of society at large. Moreover, becoming a banker or company is necessarily entrepreneurship, which creates value by bringing together two needy groups – lenders, the people, and borrowers, the entrepreneurs, and the business people.

Banks also finance housing to help customers-home buyers create an essential asset for them. Banks also widen and make faster customer reach by financing vehicles to them.

From the dawn of civilization anywhere and everywhere, we see that entrepreneurship has bettered human lives by innovating, inventing right from fire, the wheel, lever, and farming to planes, robots, and so on, and adding value for the betterment of society at large.

So, debt is a secure investment option. When you don’t want to take any risk and want a moderate return on your investment you choose debt. It is not the best investment option.

Let us move further to more investment options.

2. Gold Investment

Gold is a precious metal. However, it remains stagnant and is a static passive asset. One hundred grams of gold does not increase to 105 grams nor decrease to 95 grams. Nor does its purity change from 22 Carat to 24 Carat or vice versa.

It does not grow or change quantitatively or qualitatively. So, investing in Gold is nothing but a mere commodity rather than an asset or investment option.

Price fluctuations in these assets are solely due to the forces of demand and supply and not due to any change in their intrinsic value or actual worth.

But, Gold though a static passive asset, is a special commodity because of all its qualities, beauty, indestructibility, condensed value, universal acceptance, liquidity, and so on.

An entrepreneur, a jeweler, adds value to gold by making beautiful ornaments and selling them at a profit. But, the same jewelry loses value when brought back for resale.

It has been observed generally that Gold prices shoot up when there is a recession; stocks are stumbling, uncertainty, lack of confidence, and vice-versa.

Statistics regarding Gold prices over the last 400 years have established that Gold has always preserved purchasing power but has given minimal actual Returns. Low or negative returns have nullified exceptional Returns in patches at other times.

So, Gold is also not the best investment option. Instead, it is a commodity and static passive asset. Returns are also uncertain.

3. Diamonds as an Investment Option

Diamond is one of the most expensive crystals in the world. In India, a one-carat average Diamond costs around Rs. 3 Lakhs (whereas a 3 carat Diamond was costing Rs. 50 Lakhs.

Its extremely condensed value and portability bestow Diamond as emergency funding for the dictators, Rulers, and Super rich on a panic flight.

Like Gold, Diamond is also a commodity. It remains stagnant, static. It is a static passive asset. If you buy a 2 Carat diamond, and keep it for 20 days or 20 years, it does not grow to 3 Carat, nor does the number 1 diamond become the number 2 diamond.

It has no fungibility. Being brittle, it could be easily scratched and damaged. Therefore, difficult to maintain. A large number of variables in quality makes pricing difficult and subjective. Hence, no loan is given against Diamond as security.

Because of all this no terminal market for Diamonds, it results in no liquidity.

So, Diamonds are not at all an investment option for anybody. You can buy a diamond, which may be used to show off an expensive gem.

Let us proceed further to find our quest for the best investment plan.

4. Silver

Silver is a poor cousin of gold. Like Gold, it is also a static and passive asset. It is also a commodity than an investment option. It gets affected by climate, oxidized, is more volatile, and less liquid than gold.

Generally, the turnover of Silver is around 2% of Gold in value.

Refer: How to Extract Silver from used X-Ray

It is not a good investment option. It has only ornamental value.

5. Real Estate (R.E.) Investment

People say real estate is the best and safest investment option, is it?

Real Estate, instead, is a high investment option. You need a minimum of 15-20 Lacs to buy some property in tier 3 cities. Further, transactions of R.E. are always risky because of problems in title disputes.

There are many frauds noticed. Transaction cost is also high, i.e., around 10% of the cost. R.E. has very little liquidity. You can sell 1 ton of gold worth Rs. 300 Crores & realize the money in a couple of days.

But, when you are in dire need, you may not get even ¾th the price of a single-bedroom flat in a whole year.

You need thorough knowledge, a lot of Experience, perspective & lots of money to buy the correct type of R.E. at the right place at the right time & price. Over and above, this one needs holding power of 5 to 10 years to make R.E. investment safe & profitable.

This is not an easy proposition for most of us. Like a stock market or Gold market, there is no market like R.E. where proper price discovery takes place.

Real estate is also a static and passive asset. A 1000 Sq.ft. Flat, 10,000 Sq.ft. The plot or 10-acre farmland changes or grows automatically even if held for 20 days or 20 years.

Real estate is also an extraordinary static passive asset with significant essential uses in every sphere of our lives. Owning a house is a lifelong ambition matter of sentimental- emotional satisfaction for almost everyone.

Of course, R.E. is tangible in a real sense and has some critical uses like constructing your home, houses, school, colleges, factories, roads, shopping malls, offices, etc. Thus, entrepreneurship can add significant value to it.

You have to consider all the above circumstances before investing in Real Estate. Real estate is also not the best investment option. Keep your curiosity on before we move on to more investment options.

6. Painting/Antiques

The interested and Super Rich can buy Painting/Antiques to show off. These have a lack of fungibility, affected by time and climate. They do not have a terminal Market and liquidity.

Further, two paintings/ antiques do not become three paintings/ antiques in some days or years. And it does not grow change quantitatively or qualitatively. It also remains stagnant and static. It is a static passive asset.

Hence, this is, of course, not a good investment option.

Refer: Most Expensive Paintings in the world

7. Carbon Credit

It is a credit received for preventing 1 ton of CO₂ Green House Gases from going into the atmosphere using green renewable energies. It has little liquidity.

Perhaps ok for companies involved in Energy Business, but certainly no good investment option for individuals, at least now.

8. Commodities

Some classic examples of commodities are grains, gold, oil, natural gas, etc. Recently, it has included products like foreign currencies and indexes. Commodities are traded on a commodities exchange.

Some problems associated with commodities are storage, decay, and quality variables, making valuations difficult.

It may be suitable for Traders in a particular commodity. But, otherwise a risky investment option with little logic.

9. Forex

The term Forex stands for Foreign Exchange. Forex trading is the trading of currencies from different countries against each other, for example, US Dollar against Euro.

So, Forex is not an asset but a contract on exchange rates. It is speculative, not an asset, not an investment option.

10. Derivatives Investment Plan

Derivatives are a contract on underlying assets and not the assets. It is hazardous and certainly not a prudent investment option.

11. Equity Investment

Buying a share of a company means buying the smallest unit of ownership in a company or an enterprise. Out of the more than 5000 companies listed on BSE and NSE, many good companies are growing at a Compounded Annual Growth Rate (CAGR) of more than 18 %.

This means their Net Profits (N.P.), and Earning per Share (EPS) are becoming double every 3 to 4 years. Consequently, their book values (B.V.) and actual worth are also growing & doubling every 3 to 4 years.

Let us take some examples of companies that have given outstanding returns.

For example, Infosys is a software giant. If you had invested Rs. 1,00,000/- in Infosys (INFI) IPO in 1993, your shares would have been valued at Rs. 30 Crores now. i.e., 3000 times increase. This tremendous shareholding growth is at a CAGR of more than 40 %, which means the stock doubled in value every 1.80 years.

IPCA Labs grew at more than 17 percent Compounded Annual Growth Rate (CAGR) from 2009-10 and 2013-14 Its Earning Per Share (EPS) of Face Value Rs. 2 grew more than two times from Rs. 16.75 in 2009-10 to Rs. 37.83 in 2024-14. Book Value (B.V.) also increased more than double from Rs. 69.86 in 2009-10 to Rs. 157 in 2024-14.

Net worth got doubled from Rs. 874 Crores in 2009-10 to Rs. 1980 Crores in 2024-14. Net profit (N.P.) also got doubled from Rs. 209 Crores in 2009-10 to Rs. 477 Crores in 2024-14. The share capital was unchanged at Rs. 25 Cr.

This means that intrinsic values of Infosys and IPCA shares got more than doubled during these respective periods around Compounded Annual Growth Rate (CAGR) of more than 18 percent. The actual value, the real worth of these shares increased, and doubled on their own in 3 to 4 years. There are always many such examples and companies.

This clearly shows that shares of good growing companies are constantly growing in real-intrinsic values-Earning Per Share, the book values. Hence, they are genuinely growing Active and Dynamic assets.

So, investment in good and growing equity is an active, growing, dynamic asset, constantly increasing in absolute value. When the asset's actual- intrinsic- real value grows, the asset's market value is bound to go up sooner than later.

All the assets except equity are mere commodities. They can’t do anything independently, remain stagnant, and hence are static, passive assets.

Price fluctuations in these assets are solely due to the forces of demand and supply and not due to any change in their intrinsic value or actual worth. These assets do not change quantitatively or qualitatively.

They remain stagnant and static. These are static passive assets.

After peeping deep into the hearts and souls of all these assets, it is crystal clear that human entrepreneurship, dreams, and expertise alone are always responsible for value and additional wealth creation.

And from the point of view of investors, amongst the topmost human enterprises are the excellent corporate companies listed on B.S.E. and N.S.E. for the many advantages of investing in the listed companies.

We have seen that all the investment assets except equity cannot change or grow in their real-intrinsic values. Hence, all these assets except equity are stagnant, Static, Passive, and Assets.

To get any returns from these assets, you have to depend solely on the forces of demand and supply rather than any growth in their intrinsic value, which is impossible. Mere and total dependents on the forces of demand and supply for the price increase, returns are speculative, risky, unscientific approaches.

It is crystal clear that human entrepreneurship alone has been and always will be responsible for creating all the wealth in this world.

The best avenue for investment in this good entrepreneurship is investing in good growing equity shares of good growing listed companies growing in actual worth intrinsic value all the time, as seen in Infosys, Bajaj Finance, and IPCA LABS examples.

Hence, equity shares of good growing companies, growing all the time, in intrinsic value actual worth alone, are Active, Dynamic, and Creative, Assets and hence undoubtedly the very best Investment Option and Asset Class.

Dilip Kelkar is a Civil Engineer from VNIT Nagpur in India and holds an MBA. He is an expert in Wealth Management. He has delivered lectures on Wealth Management in premier Institutes like IIMs, ICAI, Chambers of Commerce, Persistent, L & T, Siemens, etc. You can contact him at kelkar126 @ gmail.com.