The festive season in India embarks in September every year and ends with Diwali, which is also known as the festival of lights. Diwali is one of the biggest festivals and is celebrated throughout the world. It is known to bring joy and prosperity in one’s life. This is the reason many investors wait for Diwali season to start their investment journey because it is believed that any investment made during the auspicious season will multiply your wealth by many folds.
However, investing is not an easy task. A planned investment based on proper market research will provide you returns but unplanned investments will surely lead to losses, no matter whether they are made in auspicious time or not. Markets have not been performing well in the last few months. The covid-19 pandemic and the subsequent lockdown has badly affected the economy. Investments which are controlled by emotion or haste deteriorates the capital.
It is very important to analyze various parameters before planning any investment. These include investment goals, capital, investment horizon etc. Risk profile analysis is a factor which holds the foremost importance while planning any sort of investment, but it is often ignored. A planned and diversified investment based on the analysis of all these factors helps you to extract better returns and maintain the associated risks effectively.
There are various different investment options available in the market. Let us discuss about the best investment instruments to consider for your Diwali investments.
Let us discuss about these investment options in detail and find out which one will be the perfect bet for your investment needs.
Gold and Silver
Gold and Silver are two precious metals, which have large Indian sentiments attached to them. These are also the most preferred investment option during Diwali time. These precious metals are an important constituent of the investment portfolio of Indian families because it is often assumed that the prices for them are always on a bullish run, but the reality is entirely different.
It is recommended to invest 5 to 8 per cent of your total capital in these precious metals and diversify your portfolio by considering other investment options as well. It is a well known fact that the prices of metals are inversely proportional to those of stocks and this this will be and ideal option for hedging against the overall risk and at the same time will also provide you the required boost whenever there is a surge in your equity and mutual fund portfolio.
Mutual Funds
If you want professional management without compromising on liquidity, mutual funds are the perfect investment option for you. Mutual funds have been trending nowadays as the preferred investment option because of the handsome returns, diversification and flexibility and ease of investment. Considering the growing pace of Indian economy, investment in mutual funds will generate a good corpus over a long term.
There are different categories of mutual funds and you can choose the perfect one for you out of debt, equity or hybrid funds depending on your investment goals. However, mutual funds are subject to market risks and therefore you should be very careful while investing in them. A risk profile analysis will help you in making your selection easier.
Equity Market
Investment is direct equities is one of the most lucrative investment options in India as it is known to generate multi fold returns in the long term. Buying the shares or stocks of a company simply means that you are owning a part of that particular company. With the growth of the company the prices of stocks rise, thereby generating profits for the investors. Looks easy but equity market holds the highest amount of risk.
Investing in equities with the help of Diwali Neuron can help you plan your investment in equities effectively. Market Neuron provides you a bouquet of few stocks which are expected to provide returns in the long term. These stocks are selected based on fundamental analysis by qualified researchers. If you are planning an investment in direct equities, Diwali Market Neuron can be very beneficial for you.
Real Estate
After precious metals, real estate too enjoys a high sentimental value amongst Indian investors. It is often treated as the safest investment option available. However, the sheen of real estate investments has started to fade in the recent times. Real estate may provide handsome returns in the long run due to its cyclical nature but the returns in short term are not that lucrative.
Real Estate investments are not exactly a Diwali event because they require multiple years to be fruitful. Moreover, the capital requirements are very huge which are beyond the capacity of most of the investors. If you are planning an investment in real estate, do not allocate more than 30 per cent of your capital. You can earn from rent as well apart from the price appreciation but considering the initial capital requirement the rent earned will be negligible and will usually suffice only for clearing your bank installments.
Conclusion
You must have heard that you should never keep all your eggs in the same basket. The same applies to your investments as well. You should never invest in a single investment instrument and try to keep your investment portfolio diverse. It not only helps you in extracting better returns but also minimizes the overall risk. But diversification should also be done in a limit because over diversification too is harmful for your portfolio. If you are new to the investment world and do not have an idea about the investment options and terminologies used in them, it is better to take the services of a certified investment advisor who can guide you with your investment journey by selecting the best investment options for all your needs.
Happy Investing!
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