A delegation of high-level executives from US public pension funds (non-profit and government sectors) is visiting India next week to assess and familiarise themselves with the investment opportunities in the country. These executives belong to various American states and cumulatively represent $1.8 trillion in assets under management (AUM) invested across the US and global markets. The United States (US) mission to India, which includes its embassy and consulates and the Department of Treasury, along with India's Ministry of Finance and the National Investment and Infrastructure Fund (NIIF), is hosting the delegation.
'Younger employees, who tend to have a higher risk appetite, will find NPS advantageous due to the potential gains from equity markets over time.'
Adopting overly aggressive strategies without considering risk could lead to significant losses during the next downturn.
Many senior citizens 'underestimate the impact of inflation, taxation, health-related expenses, and the heavy premium they will have to pay on health insurance.'
Younger people, who usually have a longer investment horizon which allows them to handle the interim volatility, may go for them.
Only borrow an amount that can be repaid comfortably. The ratio of total EMI to take-home salary should not exceed 40 per cent.
Consider a combination of a base policy and a super top-up policy.
'If their allocation to certain segments have become high due to strong returns over the past three-four years, they should rebalance their portfolios and bring them in line with their long-term asset allocation.'
'In phases when smaller stocks do well, an equal-weight index performs better than its market cap-weighted peer.'
All investors should ideally have a 10 to 15 per cent allocation to gold. Whether they invest in gold ETFs or SGBs should depend on their investment horizon.
'If the borrower can't repay the loan due to lack of income or losses from speculative activities, they risk defaulting on it.' 'This could lead to the bank seizing the property.'
'PPF carries minimal risk.' 'Its fixed-income nature allows investors to diversify their portfolios.'
FDs are not advisable for long-term wealth creation as their post-inflation, post-tax returns are not very attractive.
People in full-time jobs should especially avoid intraday trading as it results in loss of focus and affects performance.
'Understand how wedding expenses fit into your overall financial situation.' 'Evaluate how different levels of spending will impact other goals like retirement, travel, or housing.'
Investors should view the increase in the LTCG tax rate in conjunction with the increase in capital gains exemption from Rs 1 lakh to Rs 1.25 lakh, which will provide some relief.
Maintain a proper record of documents that can act as proof of the cost of acquisition of the property, cost of improvements made to the property, expenses related to transfer of the property (like brokerage and registration charges). These will come in handy in case of a dispute with the taxman.
Invest in MFs for liquidity and choice of funds. Invest in NPS for the tax benefits, tax-free rebalancing, and for earmarked savings for retirement.
In the case of double-income couples, not more than 40 per cent of the net income of one partner should be the EMI for the property.
'It's better to be over-insured than underinsured.' 'Ensure your home insurance includes STFI (storm, tempest, flooding, and inundation) cover for protection against monsoon rains.'
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