InvestorQ : Which strategy has produced the best returns in the stock market?
Ankit Patil made post

Which strategy has produced the best returns in the stock market?

Khushi Patel answered.
9 months ago
One of the best strategies for maximizing returns is diversification. Diversification refers to spreading your investments on more than one asset. The end goal is to increase your exposure to assets with different levels of risk. This strategy ensures fixed returns on assets with low risk so that you don't lose all your money.

But the simple rule of thumb with any investment is that; the higher the risk, the better the reward. The riskier assets will provide good returns while safer assets will deflect total loss of principal amount. Diversification is dependent on how well you choose assets with differing features. Aim for a good balance between low risk and high risk assets. Here are some ways to diversify your portfolio:

Stocks- Being one of the more riskier forms of investing where you can either gain considerable profits or lose your entire investment. Most of it is dependent on market sentiments and it is hard to accurately predict whether the market would be bullish or bearish.

Government bonds- These are long term assets with maturity period starting from 5 years to 40 years. As it's issued by the Government of India, it is relatively safe and assures fixed income. Due to low risk, the returns can only go upto 7%.

Post Office Monthly Income Scheme- This is a good scheme especially for those who are looking for an extra source of income. Again, as a government scheme it is quite reliable in terms of returns.

Mutual funds- Everyone knows about mutual funds, but there's a variety available in the market which caters to the investor's every need. It ranges from very risky to moderate risk. With mutual funds there's always a little more risk attached.