I am sure everyone is wondering what should they with their money after demonetization. The FD rates are falling, stock market crashing, housing bubble on verge of burst! you can not hold onto your old cash etc.
As of 21/12/2016
EPF
EPF is still offering 8.65% which is way better than any other fixed instrument
Mutual Funds
Currently, the stock market is trading at a fair value of 8000 levels(Nifty), there may be a chance of 10-15% correction in coming month but it gives a great chance to start investing or add onto your investment. After the demonetization fiasco settles in India and banks start giving loans at a cheaper rate. The Indian companies will start to deliver very good results. so If you start investing now , you can expect a compound growth of 15-20% in next 5 years. which is really impressive.
Arbitrage funds
If you want to enjoy a steady return similar to bank FDs but don't want to pay taxes then Arbitrage funds are made for you. They give returns in the range of 7-8% but the key thing to note is the profit is tax-free if you sell them after a year or 15% tax on profit if you sell them within a year from purchase.
Stocks
If you understand stock market and can regularly keep an eye on your investment then the next few months will give the best opportunity to get into stock market or add onto your existing investment. 3 key factors that will drive the stock market to next level next year are as below:-
As of 21/12/2016
EPF
EPF is still offering 8.65% which is way better than any other fixed instrument
Mutual Funds
Currently, the stock market is trading at a fair value of 8000 levels(Nifty), there may be a chance of 10-15% correction in coming month but it gives a great chance to start investing or add onto your investment. After the demonetization fiasco settles in India and banks start giving loans at a cheaper rate. The Indian companies will start to deliver very good results. so If you start investing now , you can expect a compound growth of 15-20% in next 5 years. which is really impressive.
Arbitrage funds
If you want to enjoy a steady return similar to bank FDs but don't want to pay taxes then Arbitrage funds are made for you. They give returns in the range of 7-8% but the key thing to note is the profit is tax-free if you sell them after a year or 15% tax on profit if you sell them within a year from purchase.
Stocks
If you understand stock market and can regularly keep an eye on your investment then the next few months will give the best opportunity to get into stock market or add onto your existing investment. 3 key factors that will drive the stock market to next level next year are as below:-
- Demonetisation - the impact of demonetization in short term will be -ve on stock market as the companies which are dependent on cash revenue will get badly impacted. but longer term they will hugely benefit as the digital transaction are going to cut their operation cost.
- Budget - it is predicted that 2017-18 budget will be way different than the previous budgets of Modi government. By doing away the Railway budget and digital India in mind, Arun Jaitley will try to give a big relief to common tax payer and try to bring in larger population into tax net.
- GST- This will be game changer for India. be prepared to see at least 10% rise in stock market when the GST launch happens.
Dont forget to read : - I have some money to be parked for some time, what should I do?
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