Are you thinking of buying gold this Diwali to appease Goddess Lakshmi? While it’s great to want to create wealth and choose an auspicious day to make your investment, do not lose sight of your financial goals and asset allocation. You also need to watch for market indicators. For example, the falling rupee has led to an increase in the price of gold this festive season.
This Dhanteras, assess your financial holdings and set your goals to determine the appropriate investment for you. Your expectation of returns and risk appetite should determine the investment assets you should pick.
Here are some attractive long-term investment options you can opt for this Dhanteras:
Equity mutual fund SIP
Systematic Investment Plan is a time-tested investment tool for long-term goals. The equity market has slowed down over the last few months, as the market corrected. Needless to say, this is a good time to start investing in an equity mutual fund. Through long-term SIP investments in the equity market, you can reduce the risk of volatility and ensure higher returns.
An SIP investment helps develop an investment discipline, as a certain amount is invested every month into a fund of your choice. You don’t need a big amount to start. You can start your investments with just Rs. 500 a month. The sooner you start, the bigger your investment pie. The power of compounding will work on your corpus and you will be able to build a huge corpus that can beat inflation, all by putting away a small amount every month.
The realty market has been going through price corrections. For investors, it is an excellent time to invest in properties at an attractive level and reap benefits from it in the long run. Property prices have come down in several metropolitan cities over the last couple of years due to the huge inventory. However, the demand for homes on rent has been rising, so investors can get attractive returns from such properties. Builders are offering discounts and attractive deals on properties to get rid of their inventory. Tax benefits and loan support make realty investments even more attractive than other asset classes.
Small saving schemes for risk-averse investors
For conservative investors, small saving schemes like PPF, Sukanya Samridhi Scheme (SSS), NSC, Senior Citizen Savings Scheme (SCSS), etc. are ideal. The interest rate has gone up recently by around 0.4 per cent. The real rate of return from investment in such small saving schemes is currently attractive, and in the long run, you can get good returns with low risk. So, for financial goals that allow low risk appetite, invest in small saving schemes to earn moderate return on investment.
Don’t wait for the tax season to set in. Plan your investments tax effectively to avoid high tax outgo and increase your effective returns. ELSS, ULIP, PPF, NPS are some investment options that offer tax exemptions. Invest in these assets this Diwali, as it’ll alleviate your tax saving obligations and fulfil your investment needs. However, tax saving investments come with a long-term lock-in, so check the impact on your financial goals before investing in them.
People sometimes find it difficult to detach themselves from gold investments, as the yellow metal has traditionally been known as a wealth creator. If gold is the only asset you are looking at, then instead of buying physical gold – where you need to pay premiums to jewellers – invest in ETFs or SGB through the stock market platform. Keep in mind that a well-diversified portfolio goes a long way, reduces risks and fetches attractive returns.