The two most famous festivals of Hindu culture-Diwali and Holi, show us how to live a better and healthier life. For Diwali, we clean the house and surroundings; for Holi, we purify our house and surroundings on “Holika Dahan”, and then splash new colors of life on “Dulhandi” the next day.
The colors of trust, bond, and friendship among our fellowship who stand by us at all times – good or bad.
Coincidentally, Diwali comes in the middle of this fiscal year, and Holi was about to end. The work we do to purify and cleanse our physical and spiritual lives also requires a financially healthy life for our portfolio. In the middle of the fiscal year, we should scan the product portfolio for cleaning, we should decontaminate it, and splash it with a new color before the end of the year.
Splashing and purifying new colors into your investment means-assessing your financial situation and risk tolerance based on any new developments in your personal life that may have an impact on your finances, and reviewing and rebalancing your investment portfolio accordingly. If necessary, then splash, that is, add new investment products to your investment portfolio.
Splash New Colors
You must consider adding the following colors to your portfolio:
Life Insurance: This is the time to reassess your financial liabilities and determine the insurance coverage you should have. Only purchase a term insurance plan, which can provide you with extremely low insurance premiums and extremely high insurance protection. A 25-year-old young man can get his own insurance of Rs 1 crore, with premiums as low as Rs 500-800 per month. In addition to the regular medical claims policies, you can also consider purchasing cancer and heart health policies provided by many insurance companies.
Mediclaim: Now, everyone realizes that if such an accident happens, they will bear medical expenses and heavy expenses. Review your existing medical claims policy, and consider increasing insurance coverage to cover the cost of diseases such as corona. Consider the family’s floating population and comprehensive policies.
Contingencies Funds: Corona exposes many people to the reality of income uncertainty. Although your income may be disrupted, your basic expenses are not. Therefore, you need to redesign your emergency funding needs. We recommend that you spend at least one year on safe and liquid assets.
Debt: Most options in debt investment provide you with a fixed guaranteed return. Choose your option based on the option’s tax, inflation, security, liquidity, etc. You might consider bank or post office deposits, government, and corporate bonds, various types of debt mutual funds, etc. Peer-to-peer lending is another type of bond investment that is gaining popularity among niche investors.
Loans: For many people with higher tax rates, it is best to avail a home loan or education loan. Personal loans can only be used as a last resort. Credit card loans should be strictly prohibited for personal use. If you carry a loan, you can consider prepaying the loan or transferring the loan to another agency that charges less interest. Don’t forget to know the conversion cost.
Gold: This is a standard hedging tool for long-term resistance to inflation and an asset that generates excess returns during periods of economic uncertainty. We recommend investing 5-15% in gold. You can invest from sovereign gold bonds and gold mutual funds to invest in paper gold-this is the best way to invest in gold.
Stocks: In order to create wealth, there is no choice but to invest in stocks. Although it still has great volatility in the short term, in the long term (for example, 10 years or more), it has always been ahead of all other asset classes in terms of yield. If you are not good at picking quality stocks, use mutual funds. SIP is the best way to create wealth silently for a long time. A SIP of only 10,000 rupees per month can earn you more than 10 million in income in just 18 years. The droplets form the ocean.
What are you waiting for? Pick up your financial plan and investment portfolio. Purify it (review) and splash a new color, that is, make changes in the portfolio based on the assessment. Contact your financial advisor to help you do this.