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I’m 35 and began investing in stocks 5 years ago. I’ve saved around Rs 10 Lakh, split between stocks (50%), fixed deposits (15%), mutual funds (25%), and sovereign gold bonds (10%). Now, I want to mix things up and try out different investment options. Where should I begin?
After 30s, planning your money is highly crucial. Whether you’re saving up for retirement, your kids’ schooling, or just wanting to grow your money, having different kinds of investments is really important. It helps spread out the risk and hopefully get more money back. With Rs 10 Lakh to invest, mixing things like stocks, fixed deposits, mutual funds, and Sovereign Gold Bonds can give you lots of options. In this Blog Let’s figure out the best plan for you and your goals.
Let’s see what Nikhil Aggarwal, CEO & Founder, (Grip Invest) takes on the above Query
Spreading your money across different types of investments like stocks, mutual funds, fixed deposits, and Sovereign Gold Bonds is a good way to start. It helps lower the risk and could bring in better returns, but there’s still a chance to make it even better.
Right now, most of your money (about 75%) is invested in things that depend on the market, which can give good returns but also means there’s a higher chance of losing money if the market goes down. The rest of your money (around 25%) is in safer options like fixed deposits and Sovereign Gold Bonds, but they might not give you as much return in the long run.
To balance things out, you might want to look into other kinds of investments that sit in the middle of these two categories. Considering your age, you could think about more aggressive options like investing in parts of real estate or Securitised Debt Instruments (SDIs) and put around 25% of your money into them. These could potentially give you returns of 10-14%, and they’re less affected by what happens in the stock market. So even if stocks don’t do well, these investments might not be hit as hard, making your investment mix safer and more diverse.
You might also want to put aside at least 10% of your money for unlisted stocks to aim for bigger returns. But remember, while this could be a good way to make more money, it also comes with more risk. Make sure you do your homework before you invest in these.
Consulting a financial advisor is helpful as they can create a plan that fits with how much risk you’re comfortable with and what you want to achieve in the long run. That way, you can have a mix of investments that’s right for you.
Investment options to Diversify your Portfolio in your 30’s in 2024
1. Equities – Stocks, also known as equities, can grow a lot in value over a long time. But they can also go up and down a lot in value. If you’re in your 30s and have a lot of money invested, it’s okay to put some of it into big, stable companies and some into newer, fast-growing ones. It’s smart to invest in different types of companies to spread out the risk. Also, think about buying stocks from companies that pay out regular dividends. That way, you can get a steady stream of income.
2. Fixed Deposit (FDs) – Fixed deposits are seen as a safer way to keep your money. They give you a set amount of money back, and they make sure your money stays safe. They might not make as much money for you as stocks can, but they help keep your investments steady. It’s a good idea to put some of your money into fixed deposits, especially if you want to make sure your money is safe or if you might need to get to it quickly in an emergency.
3. Mutual Funds – Mutual funds are like a big pot where lots of people put their money together. Then, a team of experts manages that money by investing it in different things like stocks and bonds. To spread out the risk even more, you can put your money into both stocks and bonds through mutual funds. Stocks can be from different parts of the market, like big companies or smaller ones, while bonds offer safety and a steady income.
4. Sovereign Gold Bonds (SGBs) – Sovereign Gold Bonds are like a way to invest in gold without actually having to keep it in your house. The government of India issues these bonds, so you don’t need to worry about storing gold or if it’s real. On top of that, these bonds also give you some extra money, which makes them even better than having physical gold. It’s a good idea to put some of your money into Sovereign Gold Bonds because they can protect your investments from things like rising prices and problems between countries.
5. Real Estate – Investing in real estate is a good way to diversify your investments by buying homes, offices, or even investing in REITs. Real estate can make you money through rent and by increasing in value over time. It also helps protect your money from losing value because of rising prices. But before diving in, make sure to research well, checking where you want to invest, how the market is doing, and how much rent you could get.
6. Securitised Debt Instruments (SDIs) – Investing in securitized debt instruments means putting money into bundles of loans like mortgages or car loans that are sold to investors. They can bring in regular income through interest payments and add variety to your investment avenues. But, keep an eye out for the risk that borrowers might not pay back their loans, and how the market can change quickly. Before jumping in, do some research and maybe talk to a financial advisor to see if these investments match what you’re looking for and how much risk you’re comfortable with.
Benefits of Diversifying Your Investment Portfolio
Diversifying your investment portfolio has several benefits:
- Reducing Risk: When you divide your money among various kinds of investments, you decrease the chance of losing it all. If one investment doesn’t do well, the others might do better, which can help balance out any losses.
- Increased Potential for Profit: Diversifying lets you access different investment chances, some with big growth potential. While some investments might bring in lots of profit, others could offer stability or a regular income.
- Protection Against Market Changes: Various investments respond in diverse ways to shifts in the market. Diversification softens the blow of market ups and downs by lessening the overall unpredictability of your portfolio.
- Opportunity for Income Generation – Expanding your portfolio can involve investments that bring in regular income, like stocks that pay dividends or bonds. This can give you a dependable source of money along with the possibility of your investments growing in value.
- Consistent Stability Over Time: A varied portfolio is better equipped to weather economic slumps or shifts in the market. It can keep you aligned with your financial objectives in the long run, regardless of momentary market shifts.
Conclusion
As a 30-year-old investor with Rs 10 Lakh to invest, spreading your money across equities, fixed deposits (FDs), mutual funds (MFs), and Sovereign Gold Bonds (SGBs) can help you explore different investment options while reducing risk. Before making any investment choices, be sure to do thorough research or consult with a financial expert. Stay updated on market trends, economic signals, and global developments that could affect your investments. By taking a balanced and diversified approach, you can move closer to your financial goals and build wealth for the long term.
