Investment options for you in 2013
Before deciding upon where to invest, you need to weigh the various assets available for investment purpose. As the new year begins, you need to look at these various sources of investment and how they are expected to perform in 2013. Property and gold are always considered to be safe bet for investing and sensex is showing a sign of revival as well. You need to decide upon the best possible asset for investment purposes and check out if any one of them holds relative advantage over the others.
Property
Indian real estate market is riding on ever escalating price appreciation. Property prices have gone up in astronomical proportion in cities like Bangalore, Delhi and Mumbai. In Mumbai, now even a 1BHK apartment would cost around Rs 1 crore. The unprecedented price rise coupled with inflationary pressures mowing down Indian economy have compelled the realty growth to slow down. Sales have dipped considerably in the big cities although price correction has not happened yet.
Cities with high level of employment creation will see good supply of real estate projects across segments. IT centres like Bangalore, Hyderabad, Noida and Chennai will continue to see high launches and residential demand.
However, investing in property in growing cities can be a good option for you as these cities will see greater rate of appreciation and rental growth. Tier II and tier III cities are deemed to expect infrastructure growth in the coming years and investing in cities like Ghaziabad, Chandigarh, Visakhapatnam, Kochi, Indore, Dehradun, Guwahati, Coimbatore, etc will bring you excellent returns as property prices are set to grow manifold in these cities.
Debt instruments
Interest rates are the highest at present and it is the best time to invest in debt instruments. The popular debt instruments are small savings instruments, Fixed Deposits and debt mutual funds. Fixed Deposits (FD) in banks are offering returns at an all time high 9.25% – 10%. Tax free bonds are offering a good return of around 7.8% too.
However, while investing in debt instruments one should tread cautiously. Debt instruments come with an inherent default risk as you may not be able to pay back the maturity as well as the coupon amount in the worst case scenario. Always keep a track of the ratings of debt instruments like bonds and go for those with excellent ratings like AAA to cut down the risk.
Debt instruments also suffer from inflation risk. If you open a fixed deposit which offers 9% interest, it may be that after a while the rate may go up to 10%.
Go for longer tenured FDs and tax free bonds with good rating if you do not want the money for long period. You may also consider small savings instruments like NSC, PPF and post office schemes for investment purpose.
Equity
Equity investment in different sectors is always a tricky territory. Government taking up steps for growth of the national economy is a good sign for the investors looking for investing in equity. Equity investments bring in good returns if investments are made for long run. While investing in equity, investors earn money by selling off their shares to other investors.
Equity fund investment is always secure when you go for large, diversified funds with a track record of consistent performance. Putting your money mainly in large cap funds is a proven secured way. Hdfc top 200, Dsp top 100, Principal Large cap fund, Franklin India blue chip, Hdfc Equity fund etc are some of the popular choices among investors.
Gold
Although gold remains one of the popular assets among Indians to invest in, one should keep in mind the depreciation of Indian currency. In fact, the past year returns on gold investment can be deemed good in terms of Rupee rather than Dollars. 2013 starts off with expectations of appreciation in money value. Gold prices have escalated by leaps and bounds in the last few years and there is every possibility of price of 10 grams of gold reaching Rs 50,000 in coming years. Despite of its soaring prices, gold remains to attract Indian investors and it will continue be so in 2013.
