Financial Derivatives – A financial derivative is an instrument whose value is derived from the value of an underlying asset. It may be viewed as a side bet on the asset. The most important financial derivatives from the point of view of investors are:
- Options
- Futures
Since every individual would like to earn return on their investment but where to invest has always been a problem. There has always been a confusion as to which instrument to invest, which instrument will give me higher returns, etc. Even now nuclear families are in and so are longer life spans. Even inflation is increasing and so do the standard of life, medical costs, and other things. In such a scenario, one need to think as to how he will take care of all his future needs and build up a corpus that will not only take care of routine expenses but also provide for extra costs, especially of health care. One need to have a corpus of funds, post-retirement, which will give him close to 100% of the salary to preserve the lifestyle he has grown to enjoy.
2 Comments