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.
Adopting overly aggressive strategies without considering risk could lead to significant losses during the next downturn.
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.
To minimise risk, invest in a debt fund whose duration matches your investment timeframe.
'PPF carries minimal risk.' 'Its fixed-income nature allows investors to diversify their portfolios.'
'Earlier there was no provision for considering TCS collected from the taxpayer for overall tax computation.' 'Now, credit will be given by the employer for TCS already collected to consider net tax to be deductible.'
People in full-time jobs should especially avoid intraday trading as it results in loss of focus and affects performance.
Most investors should have a 5% to 10% allocation to gold for diversification. They should stagger their investments to mitigate timing risk.
'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 with a long-term horizon and high-risk appetite seeking capital appreciation can consider investing in ELSS.
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.
'The move to remove indexation benefits on LTCGs presently available for property, gold, and other unlisted assets may have a negative impact as it directly impacts real estate investors.'
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.
Investors keen on mid and smallcap stocks but wary of volatility should consider multicap equity schemes over standalone midcap or smallcap schemes.
MMFs invest in fixed-income instruments maturing in less than one year, minimising interest-rate risk.
'Lack of self-control over spending leads to a credit card debt trap.' 'People think they have money and spend using a credit card, but when it's time to pay, they realise they don't have the money.'
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