Tara…
The state of only profitable stock market investment and the state of investing only in it will gradually change in 2022 and in the current year 2023, the investment world is back to the concept of ‘TARA’ (There Are Reasonable Alternatives). That is, ‘tara’ means ‘there are reasonable alternatives’.
At present, fixed deposits and debentures are paying interest at around 8% per annum till 2023. Even liquid funds have improved to give returns of 6% – 6.5%. Debt mutual funds give returns of 7.5% – 9%.
Real Estate Investment Trust (REITs) units earn an average dividend yield of 8% per annum. Also, it can be seen that the value of raids is increasing.
Invest separately…
Even though there are Tina and Tara in the world of investment, if investors follow the asset allocation method of dividing money and investing, they can get an average return of 8% – 12% per year through their investment portfolio.
As of today, the important asset / investment sectors are debt market oriented (Fixed Deposits, Debt Mutual Funds), equity market oriented (Corporate Shares, Equity Market Funds), Gold (Gold Coin, Gold Savings Fund, Gold ETF, R. There is PI’s gold bond), real estate (land, house, commercial buildings, raids). Asset allocation is the process of allocating money according to one’s age, risk-taking ability, and investment tenure.
In order to further reduce the risk, when it comes to corporate stocks, the money should be divided and invested in corporate stocks from various sectors. At a minimum, invest in stocks of companies in five sectors with growth potential (for example, financial services, information technology, pharmaceuticals, infrastructure and consumer goods).
Similarly, when investing in equity funds like index funds, midcap, smallcap and flexicap funds, the risk is reduced.
When it comes to gold, investing in gold ETFs instead of gold coins will reduce the GST tax and the cost of holding gold.
If one invested in the Indian stock market in 2022, he would have got a mere 4% return; Debt funds will generate around 5% returns during the year.
Mutual Fund Flexi Cap returns 7%. During that year the return given by gold was 13%. Raids investment has returned around 8%.
So, in 2022, if he had invested only in the stock market, he would have got a return of 4%, less than average inflation. That is, if he had invested in stock market, equity funds, debt funds, gold and raids, he would have got an average return of 7.5%.
There is nothing wrong with taking a home loan or business loan, which is said to be good credit. At the same time, it is better to avoid getting bad credit credit card loans, personal loans.
The answer to taking a home loan is that if you invest in good equity funds for 10 to 15 years in a systematic investment plan, you can build a house without taking a home loan. Similarly, if asset allocation is followed for children’s higher education and marriage, the money needed to fulfill those goals will accumulate in time.
Investing like this every month is a test of our patience. But it is the easiest way to achieve financial goals and add wealth.
The solution is to rethink…
Ignoring the problems a ‘VUCA’ environment poses is not the right solution. The right solution is to think about how we deal with the problems caused by the ‘VUCA’ environment.
By thinking like this, we will come to know new types of investment methods and investment strategies. With these new methods, we have a lot of potential to earn inflation-beating returns in the long run. If investors are smart, there is a lot of chance of making a profit instead of a loss!