And this is where opportunities can lie. So this seems a good time to look at the local commercial-property real estate investment trusts Reits. It may be time for the rest of the world to catch up. VFINX has a rock bottom expense ratio of 0. Total stock index funds are also good choices but for core holdings in and , an index fund like VFINX will likely be better because total stock funds include small-cap stocks, which will likely see significant declines during a major correction that can occur during the three-year period.
Here’s where to get industry intel for free
You save money you may need to access in the near-term, but if you’re planning your finances for the long-term, you may choose to invest it instead. Investing, generally, involves putting money into vehicles that have the potential for higher growth than a traditional or high yield savings account. Stocks, mutual funds, exchange-traded fundsand bonds are just some of fuds things you might consider putting your money. While you could grow your money faster, investing typically means assuming a higher degree of risk than you would with a savings account or a certificate of deposit account. That’s why choosing the right investments — meaning the investments that fit your goals, time frame for investing, risk tolerance, and risk capacity — is so important.
Latest Articles
Never miss a great news story! Get instant notifications from Economic Times Allow Not now. All rights reserved. For reprint rights: Times Syndication Service. Choose your reason below and click on the Report button. This will alert our moderators to take action.
Explore a different way to invest in real estate
Never miss a great news story! Get instant notifications from Economic Times Allow Not. All rights reserved. For reprint rights: Times Syndication Service. Choose your reason below and click on the Report button. This will alert our moderators to take action. Get instant notifications from Economic Times Allow Not now You can switch off notifications anytime using browser settings. MF News. Learn Ask the expert Fund Basics. Page Industries. Market Watch. Pinterest Reddit. Getty Images.
The outlook next year for these investors is a mixed bag, depending on the tax bracket and risk profile of the investor. The middle-class investor Investors in lower tax brackets are spoilt for choice.
Post Office deposits offer 7. Risk-free investments, like overnight schemes of mutual funds, offer returns of about 4. Banking and PSU debt funds yield around 6. 0220 such debt mutual fund investments are tax-efficient, they are not tax-free.
Public-sector tax-free bonds have poor liquidity bbest both purchase and sale. The yields, depending on daily vagaries of the market, can vary between 5. Brokerage can further dilute the return. To fumds up returns, investors need to take either duration risk or credit fhnds. Duration risk Higher the duration of a bond, the more susceptible it is to interest rate movements. Markets are notoriously difficult to predict. Credit risk The time to buy is when there is blood in the streets or in other words, when the prices are beaten down is an old saying attributed to Baron Rothschild.
Credit Risk funds are an offering in the debt mutual fund category that invest in lower-rated securities. This would fo akin to contrarian investing in the equity segment.
The NBFC crisis has left many credit risk funds bleeding. There are yet others who do not have any securities in the default category, but there is no assurance these will not default in future. Clearly credit risk funds are not for the faint-hearted; many of the names in their portfolio will make conservative investors shudder. What can investors do? Fixed income investors in the higher tax onvestment can spread their portfolio across the credit spectrum, from vest least risky overnight funds yielding about 4.
Investors need to be cognizant of the prospect of losses in credit risk funds, as the name of the schemes bdst. Arbitrage funds, potential tax-free play up to Rs 1 lakh Arbitrage funds offer relative safety while being highly tax efficient.
They carry the same tax treatment as equity-oriented funds. Long term capital gains in equity investments up to Rs 1 lakh is tax free. This provides an interesting play. An investor who either does not invest in stocks, or does not intend to book capital gains, can invest a maximum of investmeng Rs 15 lakh before 31st March, in arbitrage funds, and redeem the investment before 31st March, after holding for one year, booking tax-free returns of about Rs 1 lakh.
This strategy can be repeated year after year, unless the tax laws change! What is the risk in arbitrage funds? Until now they have turned out to be safe, with fixed income like returns. But mutual fund investments are, in general, subject to market risk. The caveat invesmtent true here as. The author is an expert in corporate banking and fixed income investing.
Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of ijvestment. Planning to invest in mutual funds jnvestment build a retirement corpus? Here is what you should know. Investmeny more on Best Mutual Funds for Debt Mutual Funds. Best investment trust funds for 2020 Fund News. Arbitrage funds. Long Duration Funds. Follow us on. Download et app. Become a member. Mail This Article. My Saved Articles Sign in Sign up.
Find this comment offensive? This will alert our moderators to take action Name Reason for reporting: Foul language Slanderous Inciting hatred against a certain community Others. Your Reason has been Reported to the admin. To see your saved stories, click on link hightlighted in bold. Fill in your details: Will be displayed Will not be displayed Will be displayed. Share this Comment: Post fog Twitter.
More in Investments
These offer a decent long-term income at a time when global interest rates are set to fall again — turst factor likely to help buoy their share prices over the next year. Investing for Beginners ETFs. If Ecuadorian mining grows to even half that size it will create huge wealth for investors. I was wrong. So what about this year? In any case, the danger is arguably priced in. Total stock index funds are also good choices but for core holdings in andan index fund like VFINX will likely be investmenh because total stock funds include small-cap stocks, which will likely see significant declines during a major investmnet that can occur during the three-year period. Protecting best investment trust funds for 2020 privacy limits the scope others have to use our information beyond the purpose for which it was supplied. They all involve identifying a market anomaly — something that looks unsustainable over the long-term — and then betting against it continuing.
Comments
Post a Comment