5 Top Investments to explore in and around Diwali

As the festive season draws nearer, plans of shopping, preparation of delicacies, traveling, etc., are made well in advance — a month or two! This pre-preparatory phase helps us identify all the activities that need to be done and ample time is available for anything that gets left out. Diwali, the festival of lights, that is celebrated all over the world, not just brings in happiness and prosperity, but also teaches us some lessons that can be implemented in our investments. So, during this festive season, should we just splurge on gifts, clothes, gadgets, and the like? Or should we make some wise investments that will help us prosper in the future as well? 

The wild-card entry of the Covid-19 pandemic has left all of us with a badly hit economy. This is the time where research and a positive attitude helps make the right investment choices. While investing in any kind of investment option, it is advised to analyse and understand different parameters – capital available for investment, risk appetite, investment goals, the horizon of investment, income sources, expenses, etc. This Diwali, let us peek into the top five investment instruments that are worth considering.

1. All that glitters is Gold!

Yes! The first investment option would b gold and silver. When it comes to these precious metals, we have a lot of sentiments attached and there is always an assumption of the price never falling for these metals. However, this doesn’t mean that you invest all your savings in Gold or silver. The ideal percentage of investment in these metals would be 5-8% of the resources set aside for investment. It is advised never to plant all your funds in one investment option and aim for diversification of funds. Always remember the inverse proportion of metal prices to stocks, and this is what hedges the overall risk. Additionally, if you do not wish to hold gold in physical form, you could also opt for the Sovereign Gold Bonds that has been launched by the Government of India.

2. No Risk, No Return – The Equity Market

The pandemic has definitely shown us the returns provided by the equity market in a span of just 3 months! Investing in the stock market might appear to be risky, but the returns are equally high! There isn’t the best time to enter the market. The earlier you start understanding the functioning of the market and various technicalities of the market, the more you could earn from this lucrative investment option. The best way is to diversify the stocks and own those stocks that are bound to give you returns in the long as well as short term. With technology at our fingertips, even a beginner can access informative matters regarding the stock market from experts and start investing. 

3. Manage your funds professionally via Mutual Funds

Those beginners who seek professional management with regard to investments can opt for investment in mutual funds. They offer ease of investment, flexibility, diversification of funds, and also give you great returns. This is why you will find a lot of people moving their funds in this investment option. Mutual funds are great options for long-term investments. To invest in a mutual fund, you must be aware of your investment goal, based on which you can then decide whether you need to invest in equity, debt, or hybrid mutual funds. 

4. Invest in Yourself – Insurance

While you splurge on electronics, apparel, renovation, etc., this Diwali, you must remember to get your family and yourself health insurance. If you do not have any kind of insurance, the pandemic is a great reminder to get yourself one!

5. Invest in Real Estate

Diwali is the time where gold and silver are the most preferred investment choices and real estate follows the lead. Investing in property is considered to be one of the safe options for investment. However, currently, though the real estate sector isn’t doing great, this is the perfect time to identify your dream property and begin your investment in it. The real estate sector is one such sector that does not promise short-term handsome returns, however, in the long run, the returns can be quite lucrative. Also remember, that one must not allocate their entire surplus capital in just one investment option.

Conclusion: The wide range of investment options available can make it quite confusing for beginners. The best way to begin an investment is to analyse various parameters based on which making an investment becomes quite easy and simple. Additionally, post conducting your personal research, you can also seek guidance from finance experts. You can invest your surplus funds in safe investment options like gold, fixed deposits, post office saving scheme PPF, and if you aren’t risk-averse, you could also include equities and mutual funds. The thumb rule in investments is diversification. This helps in reducing the overall risk and also ensures extracting a better return. So, this Diwali, protect your future with some wise investment decisions!

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Ved holds a Master's Degree in Management Studies in Finance from the ICFAI Business School Mumbai. He is extremely passionate about Equity markets and swears by the age-old maxim of “Time in the market is more important than timing the market”. He has in-depth knowledge & knack of the mutual fund industry and loves working on client portfolios and analyzing Mutual fund schemes on myriad subjective and objective parameters.

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