Hope you all are safe and doing fine. I would like to bring the below mentioned updates to your notice.

Traditionally most of the investors particularly sr. citizens have been worried about low interest rates where the cash flow component is reducing with each passing year due to fall in interest rates.

In order to earn higher returns people are looking for other alternatives without understanding the risk element.

My humble suggestion would be particularly for people in nil and low tax brackets, first preference should be given to Post Office Sr. Citizen Scheme and RBI Taxable bonds to meet the need for regular cash flows. And next debt funds and dynamic asset funds can be considered based on your asset allocation.

The interest rates offered by them are higher compared to bank FD’s. Both of them are offering 7.4%. for some of you I proactively made you to subscribe for it based on your overall asset allocation and individual profiles.

For people in higher tax brackets, to make up fixed income allocation debt funds should be idle to earn a better post tax return. And important point to note is that past returns are not possible. However they are still better than FD’s.

Based on your individual profiles I utilized the fall in market and added equity. And with the sharp run and missing valuation comfort and keeping in mind your overall asset allocation, currently I’m not adding further equity.

Some segments of the market are trading at very high valuations and some are trading at dirt cheap valuations. For example the dividend yield on some stocks is better than FD rates.

Do not fall for rising prices of speculative stocks recommended by guru’s in business channels. They come up with decent stories and have vested interest. Those of you who are in full time investing have practically seen and experienced it. Do not risk capital irrespective of valuations and without backing of business fundamentals. It applies for all other asset classes like real estate etc.

In the last couple of years many scams are getting unearthed particularly in the stock broking industry offering guaranteed returns. So beware of it and do not fall for such offerings. With markets gaining momentum such scamsters are again back in the business.

Avoid investment cum insurance products. Do not blindly go for it just because of reputed brands. The returns are sub optimal. Many of you have bitter experiences. Insurance is for risk cover. Don’t mix it with investment. Opt for only a pure Term Plan based on your individual profile.

Do let me know in case of any further queries or information.