Bonds & ETFs — Beyond Stocks

Stocks are not the only instruments in the market. Bonds are debt instruments — you lend money to a company or government and receive fixed interest. Lower risk than stocks but lower returns too. Government bonds (G-Secs) are the safest. Corporate bonds offer higher interest but carry company risk. ETFs (Exchange Traded Funds) are baskets of stocks that trade like a single share. A Nifty 50 ETF holds all 50 stocks in Nifty in the same proportion. Benefits: instant diversification, low cost (expense ratio 0.1-0.2%), easy to buy like a stock. For beginners, index ETFs are one of the best starting investments.