Smart financial investment for this Diwali-Aditya Damani
Depending on the financial goal, risk appetite and length of an investor, one can choose from several options currently available including mutual funds, stocks, commodities and real estate or from a multitude government securities and bonds.
The holiday season in India marks one of the best times to embark on the financial investment journey – whether it’s buying commodities like gold or silver or investing in the latest. actions ahead, there are many investment options this Diwali.
Depending on the financial goal, risk appetite and duration of the investor, one can choose from several options currently available including mutual funds, stocks, commodities and real estate or from a multitude government securities and bonds.
Having a diversified portfolio is of the utmost importance for an investor.
But why is this the case?
Well, there are few reasons: it’s because all types of asset classes hardly work in tandem – different asset classes move in different directions at different times. One would assume that since a particular mutual fund performs well at any given time, it is best to invest in it at that time, but the market timing is very difficult.
For example, it often happens that while the stock markets go down, the prices of gold and silver go up! Therefore, asset allocation through a variety of investment tools is essential as it helps an investor stay afloat even during tough times.
Now, the world of financial investing offers a range of asset classes to choose from. The main ones that make your portfolio interesting are:
Actions / Actions: Invest directly through equities in the capital markets
Mutual fund : Investing in mutual funds through systematic investment plan (SIP) instruments
Fixed income: These include term deposits, debt securities, money markets, government and corporate bonds.
Merchandise : Metals like gold and silver are some of the best investments in asset classes during Diwali.
Immovable: Despite several opinions, real estate investments are very profitable. Investing in a Real Estate Investment Trust (REIT) this Diwali is a good option, especially at a time when crude prices are almost skyrocketing. REITs will not only guarantee better returns, but will also ensure that their income is not taxed, since the government has granted them transfer status.
As an investor, if you are considering choosing certain asset classes, it is best to select them based on your risk appetite, goals, and time horizon.
Now, when it comes to the best investment tools in terms of time horizon, mid to long term open end mutual fund SIPs are one of the best.
Supervised by a fund manager, one can easily start a SIP with a minimum amount of Rs 500. There are several options from which an investor can choose. Open funds are offered by almost all fund houses and other large financial institutions, including banks.
Recently, capital markets have hit an all-time high; however, if you are looking for debt mutual funds in order to diversify your portfolio, it is more advisable to look for other options instead of the first one.
Since the Franklin fiasco last year after the first phase of foreclosure, the SEBI has ended up introducing some tough rules, especially for top fund managers and other guidelines for the mutual fund space. of debt. This shocked the industry and the sentiments of retail investors collapsed.
However, staying invested is necessary especially when a market correction is underway. And in this scenario, other alternative investment assets are needed to build a strong portfolio that can help generate good returns. Some different asset classes that are worth considering for this Diwali include:
Non-convertible bonds: – Non-Convertible Debentures (NCDs) are fixed income instruments issued by well-rated companies as a public issue aimed at long-term capital appreciation. These instruments offer a relative interest compared to convertibles.
Market Related Obligations (MLD): – They are a kind of debt instrument whose payment is not regularly defined, but linked to an underlying security or index such as BSE Sensex or 10-year government securities. These are formed by wrapping derivatives and DEMs. One of the main advantages of investing in LDMs is the major tax benefit offered. These are only taxed at 10% if they are sold on the market after one year.
Sovereign Gold Bond: – These types of bonds are generally considered substitutes for the accumulation of physical gold and are G securities denominated in grams of gold. The Reserve Bank of India issues the bonds on behalf of the Indian government.
Diwali is one of the best times to make good financial investments. Currently, the country’s economic landscape is also conducive to making some major investments.
So consult your financial advisor, set your goals, and then take the plunge as you prepare for Diwali celebrations.