Managing personal finances can be hard even in the best of times.
Which asset classes does one invest? Millennial choice of participating in the equities/stock market or follow the age old wisdom of your fathers’ in real estate aka land/apartment/villas? The all consuming blitzsy rage of cryptocurrencies, NFT’s or the conventional grandmothery wisdom in investing in gold?
This blog will not offer you investment advice in choosing the right portfolios for you but rather offers investing reminders of the dark years of 2020/21 and the lessons learnt.
Real estate returns
The main investment story of the pandemic has been the realization that investment in real estate aka land, buildings, apartments and house properties aren’t always the safest investments of your portfolio. Demand for both commercial and residential properties waned in a jaw dropping fashion while the rentals continue to be extremely weak in the metros given the home working practicalities that doesn’t require in-city presence for most jobs. Builders were left with surplus supply of unsold properties while buyers were scarce or non existent, given the pressures of job losses and general economic slowdown.
Indian Equity markets have had a surprising bull run since March 2021 recovering from the precipitous lows from earlier. If you have been a consistent SIP investor without being driven to doldrums or euphoria in turns, given the highs and lows of the market, chances are that your investments have offered you steady returns unmatched by other conventional sources of investment. As a investor, I have already discovered the wisdom of not trying to “time” the market but rather investing at a steady pace and at regular intervals.
Decide on your risk appetite: whether aggressive or medium or low risk and invest accordingly in small cap/medium cap/large cap/bluechip portfolios whether via mutual funds or individual stocks. Mutual fund investing may be a better option for retail investors. Stay invested for a long/medium term for relatively stable returns.
India’s love affair with the gold continues. The yellow metal has captured both the romantic imagination as well as the investing zeal of the populace at large since time immemorial. Nonetheless, given the government’s zealousness in taxing physical gold, paper gold via gold ETF’s are better for your pocket, if your mission is to participate in the gold price peaks.
NFT’s/Non fungible tokens:
NFT’s are all the internet rage of investing right now. Many trading apps, investment sites in India breathlessly tout the benefits of NFT trading which begs the question: What is NFT?
NFT is basically digitization of any valuable item such as for eg. art. I am undecided on the upsides/downsides of this investment option but I tend to stay away from investing in assets that is not well understood or well documented.
The good ol’ FD’s:
The traditional fixed deposit investments by the retail investors have undertaken a beating in terms of returns offered in the past year. Interest rates are on the decline and would probably remain weak in the near future given the pandemic pressures on the economy. PPF’s may offer better returns than bank fixed deposits.
Disclaimer: This post is a reflection of the author’s views and does not constitute investment advice in any form/type.