Where should I be investing in 2020?

A very close friend of mine is the Chief Investment Officer of a very big and reputed Mutual Fund. But he is always complaining that every time someone meets him the first question they ask is where should I invest?   He gets really bugged by this. One cannot just go about giving random advises.

Just imagine if he gave random advise or names of some random Mutual Funds and stocks  or for that matter any other investment advice without understanding When they need the money and for what purpose or goal. Is this fair for the investor? I know it’s not right to just dish out random advice but the investor does not understand. Time and again it has been proved that investing on random advice is DISASTROUS!!

Despite all this I am sure by now most of you will be like get on with the article and just tell us which product should I be investing in?

Contrary to what anyone says or writes there are just this many asset classes – Equity, Debt, Commodity like Gold and Small Savings schemes. All the investment avenues fall under the above mentioned asset classes. There are sub classes which fall under the above mentioned asset categories. New funds get added or new bonds get released no new asset class.

So what would my advice be for 2020 –

INVEST AS PER YOUR GOALS AND NOT AS PER YOUR NEIGHBOURS OR A RICH FRIEND OR RELATIVE

What is right for your neighbours, relatives or friend may not be right for you. If you need money in another three years you should definitely not be looking to invest in Equity. Or if you need the amount for a goal which is 10 years away you should definitely not be looking to invest in Fixed Deposit or Debt products.

So list down your goals with the time frame you want to achieve and then accordingly plan your investments –

  • If your goal is 2 to 3 years away – definitely look into debt products like Short term debt fund or fixed deposit or Fixed Maturity Plans.
  • If your goal is 5 to 7 years away – then you can have a mix of balanced funds (with more exposure towards equity), Fixed Maturity plans, if good AAA rated Company Fixed Deposits then can consider investing in that.
  • If your goals are more than 7 years away – then you can definitely invest in good Equity Mutual Funds, direct equity or ELSS.
  • Gold – I always advise to invest at least 3 to 5 per cent of your total portfolio in Gold or Gold based Mutual Fund  as its one of the most liquid asset in the world and can be liquidated anywhere in the world. Do bear in mind buying jewellery does not count as investments.
  • PPF – a must. Its tax free with deduction available under section 80C.
  • Small saving schemes – a good investment product for senior citizens.

It is not that I am stopping from investing in good  Investment product, but just a way of bearing in mind that if I am investing in Direct equity then I know that my money can get stuck and I have other liquid asset to help me with my need.

Plan wisely and Invest Smartly!!!!!

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