While gold is a great way to start Samvat 2077, amid high prices, you can look at alternatives to welcome Goddess Laxmi into your home this Diwali.
Since purchases are made on the occasion of Dhanteras for good fortune and prosperity, they are often meant as long-term investments. However, long term investments also require diversification to reduce risk and stabilise returns over time. Investment advisors say that one should not invest more than 10 percent of their portfolio into gold.
Here are 4 such investments that you can make despite your gold purchases, to avoid putting all eggs in one basket this Diwali:
Also called poor man's gold, silver is known to replicate gains seen in the yellow metal. In fact, over the past year, with gold prices scaling new highs, investors have been picking silver, a more affordable alternative.
Since the last Diwali, gold prices have climbed 29 percent, making it one of the best performing asset classes. But, silver prices have surged more than 35 percent.
Gold and silver prices in India have climbed from Rs 38,923 per 10 grams and Rs 46,491 per kg in Dhanteras 2019 to over Rs 50,520 per 10 grams and to Rs 63,044 per kg, respectively.
You can invest in the form of physical silver, futures contracts on MCX or even silver ETFs.
2. Mutual funds
If you were to check historic data, mutual funds have proved to create wealth for investors in the long-term. They are also a great way to passively invest in the market and diversify investments.
If you wish to diversify further, you can pick the SIP (Systematic Investment Plan) method.
As you will be required to make equal monthly payments towards the SIP over time, it helps spread out costs via rupee-averaging, which means that you do not have to worry about the volatility in the markets or rupee valuation as the costs with average out over time.
It is a great option for regular investment for salary earners.
3. Real estate
After demonetisation and now the pandemic, the real estate sector has been affected. Property and apartment prices have fallen in the last few months due to low demand.
To push sales, the government has also been announcing various initiatives. The most recent being the announcement of additional fund allocation of Rs 18,000 crore for PM Awas Yojana-Urban over the existing Budget Estimate for 2020-21, made on 12 November by the Finance Minister Nirmala Sitharaman as part of the government's stimulus to support the coronavirus-hit economy.
Further, the difference between circle rate and agreement value has been increased from 10% to 20% (under sec 43CA) till 30 June 2021 for only primary sale of residential units of value up to Rs 2 crore. This will help developers clear unsold inventory, Sitharaman said.
Consequential relief of up to 20% will be allowed to buyers of these units under sec 56(2)(x) of the IT Act till June 2021.
It is clearly a buyer's market in real estate right now.
Property investments also help create wealth in the long-term.
With Mahurat Trading at 6 pm on 14 November, Dhanteras could be a good time to pick stocks for long term investment. Various brokerages have already given their recommendations for Mahurat trading.
Equities perform best when held for a long period of time. However, it is important to make the right pick and reassess your choice of stocks from time-to-time to make the most of your investment portfolio.
The article is purely informational and is not a solicitation to buy, sell in securities mentioned in the article. Greynium Information Technologies Pvt Ltd, its subsidiaries, associates and the author do not accept culpability for losses and/or damages arising based on information in this article.