They say when trouble comes, it comes in full force, in plenty and from all sides. This holds true for the present situation in the global and Indian markets. Economy too is in a bad shape. In such a situation, retail investors easily get lost. In short, condition is extremely complex for retail investors to make sense and hence earn some decent returns. What should you do in such a case? According to a report published in Business Standard today, you should not rejig your investment portfolio now.
Though experts are unanimous in that we are getting close to a lower interest rate regime, ground reality is different. Though the apex bank has cut key policy rate by 125 basis points through last one year, banks haven’t transmitted any significant amount rate cut to customers.
Gold prices have been on a trip of their own, giving insignificant returns due to the fall in the rupee, which has also put the economy in difficulty. Stocks have seen a bloodbath too.
To earn some decent returns, your portfolio should earn at least five percent higher than CPI-based inflation, which is close to double digits. “Even if one invests in corporate bonds that offer 12-13 per cent, there would be a tax element, and this would bring down gains. So, this year, one has to live with lower real returns," Business Standard report quotes Certified Financial Planner, Gaurav Mashruwala, as saying.
In short, there isn’t much you could do now to get decent returns. You could take a medium term call on gold, since prices fell globally yesterday and today. But gold should not be more than 5 to 10 percent of your portfolio. Read the whole Business Standard story here.
We think, these are difficult times to figure out as a retail investor, it is best to get in touch with your financial planner to see if your portfolio needs a rejig.