We are slowly coming out of the ferocious covid second wave. My heart goes to all the families who have lost their near and dear ones to this potent virus.

Coming to the investment front, globally equity markets are in uptrend. Traditional investments offering low returns.(less than inflation on post tax basis).

Huge liquidity created by central banks is lifting all asset prices starting from equity, commodities, etc, which in turn pushes inflation higher.

In times like these one should not deviate from asset allocation and take unnecessary risk based on past returns of equity and prospective low returns from fixed income space.

Due importance needs to be given for preservation of capital. Don’t lock your money in very long term Fd’s as interest rates have bottomed out. don’t invest in direct stocks based on tips and news flow without understanding.

With rising inflation and normalcy returning at some point central banks will stop the liquidity taps, which may give way to rise in interest rates.(When it will happen nobody knows)

I would like to highlight the current investment options to consider in the present scenario.

Money you need in a year to be in short term debt categories and bank FD’s. Accept low returns. Returns will be in the range of 5-6%.

For 3 year plus horizon falling under the tax bracket consider debt funds. For those not in tax bracket bank FD’s, reputed corporate FD’s can also be looked upon along with conservative hybrid funds.

For SR. Citizens with no tax liability and cash flow requirement should give priority to the Post office sr. Citizen schemes, RBI floating rate bonds then come to conservative hybrid asset allocation funds.

For Sr People in higher tax brackets debt funds, hybrid funds are best suited to take care of their cash flow needs through SWP (many of you are already in it)

Beyond 5 and above horizon in the current juncture lumpsum can be considered only in asset allocation funds depending on your individual profile.

Apart from long term SIP’s I’m not recommending lumpsum in pure equity funds in the current juncture. STP’s of one year can be considered along with top ups in corrections.

For some of you initiating certain changes since the last couple of months in a phased manner, the reasons which I highlighted earlier. Further changes will be done based on your individual portfolios and asset allocation.Some of you have already had some exposure to international equity and gold. Those you do not have will consider adding at an opportune time.

Do let me know for any further information.