Bank FD, bond to Mutual Funds: Which asset is ideal for investing explained
Navigating economic uncertainty requires a long-term strategy and a well-balanced portfolio. Diversification, focusing on quality and stability, and keeping an eye on changes in regulations and policies can help investors mitigate risks and position themselves for long-term growth
PremiumThe current investment landscape presents a unique opportunity for investors due to the increased maturity observed in the ecosystem. With a comprehensive understanding of market dynamics, investors can navigate economic uncertainty and unlock immense potential.
All investments have risk and differentiating between a good and bad investment isn't always easy. The right way to navigate uncertainty in the world of investments is to have a long-term strategy and a well-balanced portfolio.
Investing in driven by emotions
Investing is far more driven by emotions than most investors would agree to admit to. According to Nikhil Aggarwal, Founder & CEO at Grip, in times of economic uncertainty, a common emotion is ‘fear’ of loss. This drives many investors to liquidate their holdings.
Bank FD, corporate bond to Mutual Funds: Where to invest
"A combination of (a) capital protection investments like fixed deposits, (b) high-risk market-linked instruments like mutual funds and stock along, and (c) medium-risk non-market linked options in fixed income like corporate bond and asset-backed leasing," suggested Nikhil Aggarwal, Founder & CEO at Grip
Investing during uncertain times can feel daunting. It's a constant battle between sitting tight and wanting to do something.
Satyen Kothari, Founder & CEO, of Cube Wealth, suggested four options
1)Firstly, evaluate your risk tolerance: During the COVID-19 pandemic, global and Indian markets faced significant volatility, highlighting the need to assess risk tolerance.
2)Then ensure you've diversified across sectors. The pandemic reminded us that uncertain times impact different sectors differently. Initially, the IT sector performed well while travel and hospitality faced challenges. So, diversification across sectors mitigates industry-specific downturns.
3)Next, I would suggest you focus on quality and stability. For example, established companies such as TCS and RIL etc may demonstrate resilience during uncertainty due to their strong fundamentals and diversified business models. So keep this in mind whether you're looking at stocks or other assets.
4)Besides this keep an eye out for changes in regulations and policies, such as GST and financial sector reforms, that can impact your investments. This will help you stay ahead of changes in risk that your investments hold.
“The key lies in identifying sectors and industries that exhibit resilience and adaptability. By strategically allocating capital, investors can position themselves for long-term growth and expect a multiplier effect on their investment. Moreover, economic downturns lead to market corrections leading to favorable conditions for value-oriented investments," said Roma Priya, Founder, of Burgeon Law
Investing in the right opportunities today will contribute to building a more resilient and prosperous future. By focusing on companies with strong performance indicators, investors can enhance their likelihood of favourable outcomes.
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