Financial investment ideas: Need innovation in product and packaging

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Subscribe to enjoy similar stories. There is a fundamental difference between financial investment products and other conventional products we consume. Investments have no ‘product’ with a look and feel.

You are sacrificing your current consumption, expecting to get back a higher amount in future. An investment ‘product’ is created by a manufacturer through the brochure/other literature, and the terms are formalized in the offer document. The higher amount of money you get back in future is known by various terms–capital appreciation (equity and gold), interest (bonds) and rent (real estate).

The difference between investment products comes from two variables: risk and return. Equity is a relatively higher risk and a higher return. Bonds are relatively lower-risk, lower-return.

There are extremes like very-high-risk and very high expectations, such as cryptocurrency and stressed debt. There are very safe products with relatively lower returns, for example, government bonds or overnight funds of mutual funds. Apart from the fundamental differences, there are multiple features in financial investment products, for example, liquidity (withdrawal/sale in secondary market), differentiation in the underlying investment universe from similar products (large cap/small cap) or risk coverage (insurance).

Innovations in financial investment products occur every other day within the regulatory framework provided by Sebi, RBI, Irdai, and other regulators. The investor has to scratch the surface and understand whether the innovation is significant (product innovation) or a change in the features (packaging). Here is an analogy: Car manufacturers introduce new models with certain features, like parking sensors or dashcams, but the