60 per cent in Debt

It is a good idea to deploy at least 60 per cent in debt, given the fact that the Sensex is nearing record highs. Also, if you are disillusioned with stocks, you can look for good for high quality debt.

Look for investments in deposits of NBFCs. For example, Mahindra Finance offers you an interest rate of 8.8 per cent on its 5-year deposits, while Bajaj Finance offers you an interest rate of 8.75 per cent. Both of these are AAA rated deposits. The government owned KTDFC is also not bad, given that it offers an interest rate of 8.5 per cent on its 36-months deposit.

Banks at the moment do not offer these kind of returns. So, if you have a sum of Rs 5 lakhs, you might want to put up to Rs 3 lakhs in debt.

Another Rs 1.5 lakhs in equities

Since equities have had a smart run in the last few weeks, we have recommended investing a smaller amount. When the markets are high, the most important thing would be to protect your capital. It is with this in mind, that we have recommended only investing a small amount.

However, should the market fall from higher levels, it would be time to buy into good quality dividend paying companies.

Among the stocks that one could look at include names like IndiaBulls Housing and Coal India, whose dividend yields are more than 5 per cent.

Around Rs 50,000 in gold

Gold is a must investment destination, primarily on account of the fact that it provides a hedge. It enables diversification. The reason why we have suggested a small amount is on account of the fact that the precious metal has failed to deliver any returns in the last few years.

In the last one year, the returns have been marginally positive at one per cent. The more exposure one has to gold, the less returns are likely.

Investors can look at various options for gold, including the likes of gold futures and also physical gold.

Disclaimer

This article is strictly for informational purposes only. It is not a solicitation to buy, sell in securities or other financial instruments. Greynium Information Technologies Pvt Ltd, its subsidiaries, associates and the author of this article do not accept culpability for losses and/or damages arising based on information in this article.