Tuesday, May 14, 2019

Best Investment Options for 2019

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Equities had a great run in 2018 and first quarter of 2019 but will it continue till rest of the year? There are many headwinds for stocks in 2019:

1. Global Stock Markets at a record high with Nifty above 11300 having touched 11700 few weeks back.
2. Trade tensions between China and US causing turmoil in global markets.
3. Earning season in India was average and not great which the market was expected and had priced in, though there is some recovery in some of the banks.
4. Political uncertainty is at a high with election results in 10 days. Market had priced in victory for the current establishment but with a lower number.
5. There seems to be some slowdown as reflected by consumption figures and auto sales trend.
6. Crypto currencies and Gold has risen again given the global turmoil.
Even if the markets have come off its all time high, they are still at a premium valuation. It would be safer for markets to correct some more and then start investing in equities and that too in a systematic way with small investments spread every month with a view of long term investment. 

For people, who cannot afford to take the risks that come with volatility of stock markets, one could look at some bank fixed deposit options for rest of this year. There are too many headwinds for the stock markets and it would be much safer to invest in fixed deposits. Have a look at the latest bank fixed deposit rates. NPS is another good option which offers higher return but with much lessor cost than a mutual fund. Though, there are some restrictions in withdrawal, so invest in NPS only if you have a very long term horizon.

For senior citizens, there are some better schemes like Senior Citizens Savings Scheme and PMVVY which offers safety from government of India and higher interest rate that most bank fixed deposits.

There are some high quality company fixed deposit that can be looked at but they come with higher risk and the additional interest rate over bank fixed deposit is not so high to warrant that risk. KTDFC and other NBFCs have come out with their fixed deposit options.

Even though gold doesn't have any cash flow associated with it, but prices have risen over the last few months. So, it may not hurt to buy gold coin or invest in Gold ETF. Even better option is Soverign Gold Bonds from RBI. Given the market uncertainties, gold can be a good investment.

Real Estate market has picked up in the last few months though if there is a slowdown - local or global, real estate market will take a beating as well. 
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