The mantra that works for me is to keep investing simple. By simple, I mean using as little time as possible and achieving the financial goals that are to be met. The first step is to consider what these financial goals are? Broadly, goals are of two types, short term goals – where you want to invest money only for a few months or a year or two before using it for some previously identified purpose. Along with returns, the safety of capital is paramount in this case.
The second type of goal is long term, which spans years or decades and usually is tied to a purpose that can benefit from your money growing and multiplying.
If you want to keep it simple, for short term goals look at bank fixed deposits for the tenure you need or debt mutual funds which have a AAA or highest quality portfolio and average maturity of less than one year.
For long term goals, equity stocks and equity mutual funds are the best option. They are tax-efficient if held for more than a year. They can help you compound your wealth over time. Investing in stocks and funds is a low-cost affair and there is transparency in the process. Moreover, the stock market is a regulated industry and there is some recourse in case things go wrong. Bank fixed deposits and debt mutual funds for short term goals and equity stocks and equity mutual funds for long term goals, are the simplest and most efficient ways to invest your money.
Money Diary – What should you do when markets correct?
Hugely inspired and slightly borrowed from Rick Kahler, MS, CFP, CFT-I, CeFT, CCIM and his The Financial Therapy Podcast. This video is for Indian investors who are confused about what to do in today’s volatile market conditions and how to make use of the correction. Four Easy Steps to follow for clarity on what you should do.
What is the best tax-saving investment? − Money Essentials #10
When choosing where to invest for saving tax, why not also think of the most efficient investmentAn investment is made to give you a return. You make an investment if you use your money to buy either physical assets like property or financial assets like bonds and equity with an aim to receive income or gains... More considering the balance of both risk and return. There are several tax-saving investments like public provident fund (PPF), unit-linked insurance plans (ULIPs), national pension scheme (NPS), national savings certificate (NSC), equity-linked savings scheme (ELSS), long term fixed deposits, to name a few of the prominent ones.
How will bank fixed deposits help me? − Money Essentials #9
Fixed deposits are the talk of the town with interest rates heading higher. Indians already have a bulk of their savings in bank fixed deposits. But, do you know how this investmentAn investment is made to give you a return. You make an investment if you use your money to buy either physical assets like property or financial assets like bonds and equity with an aim to receive income or gains... More can help and what are the shortcomings of fixed deposits?