INVESTMENT AVENUES

SOME OPTIONS
Shares/ Stocks Listed / Unlisted
ADR/GDR/IPO

Debt
Govt. Bonds / GiltEdged - Central/State /municipal Corporate Bonds / Debentures Short term Call money market / Commercial Paper Securitized Instruments

Bank Deposits Company deposits

Further Options
Small Saving Schemes
Public Provident Fund National Saving Certificate Post office Time Deposit Account Senior Citizen Saving Scheme

Mutual funds/ETF Insurance Currency Real Estate

More Options
Bullion/Silver Commodity Derivatives

Exotic Options
Precious / Semi-precious stones Paintings and artifacts Antiques

National Saving Certificates

Govt. mobilizes savings of general public Operated through Post Offices Interest rate 8.5% Tenure 10 years , Amount invested qualifies as deduction from total income in tax calculation

Public Provident Fund

16 years Extended for blocks of 5 years Select Branches of SBI and some nationalized banks Minimum amount Rs.500/- per year Maximum amount Rs.1,00,000 per year Interest rate 8.7% Amount invested is deductible from total income Interest income is exempt us 10 of the IT Act

Post Office Deposit Schemes

Senior Citizens
Age > 60 Max 15 lakhs Interest 9.2 % Interest paid quarterly Maturity 5 years

INSURANCE
Life Term Insurance Whole Life Insurance Endowment Non-Life / General Medical House House loan

REAL ESTATE Land & House Property

Psychological satisfaction

Capital appreciation
Tax Benefits

Lure of Gold
Sentimental and social value Method of saving by housewives Jewelry/ Ornaments sense of security and status symbol Gold Bars & Gold Coins Money store of value SBI Gold Deposit Scheme(3-7 years/3-4% int) Gold ETF / Gold Mutual Funds

Diamonds are forever

Carat Clarity

Color

Poor Liquidity Subjectivity in valuation Substantial Investments No regular income Instead Cost of insurance and storage

Cut

The Smile of Mona Lisa

Painting are becoming popular Substantial appreciation in value of paintings of Hussain and others Difficult to estimate value Liquidity Auctions No Regular income Functional Art

Love for History

Antiques are difficult to obtain Government regulations Inability to assess value of antiques Unpredictable appreciation in value Flourishing fake antique market

Where do I Put my money

Low Risk , Low Return
Investment Saving Account Fixed Deposit Benefit
Liquidity, Meet Emergency Flexibility in tenure (15 days to 5 years) , amount and frequency of receiving interest . Loan can be availed against it Tax deduction Tax deduction , Loans can be availed against it Tax deduction , risk protection

Disadvantage
Idle cash , loses value (due to inflation) Low returns may not even cover inflation

NSC Certificates PPF & EPF InsuranceEndowment

Blocked for 6 years Only on maturity Only on maturity Large amounts , maturity

T-Bills, Govt. Bonds

Where do I Put my money

Moderate Risk , Moderate Return
Investment ULIP / Retirement Schemes Debentures and Bonds Real Estate Benefit
Minimum return assured Returns are likely to at least protect against inflation , low volatility Tax benefit , Security Currency , has not fallen in the long run Professionally run , regulated , some have tax benefits

Disadvantage
Illiquidity , fixed timings If not tradable , low liquidity Illiquidity, maintenance cost Storage risk and cost if in physical form, Lock in periods , costs

Gold
Mutual Funds money market, gold, balanced

Where do I Put my money

High Risk , High Return
Investment Mutual Funds Stocks Stocks (listed companies ) Derivatives Diamonds, Art, Antiques Benefit
Diversification , SIP, Professionally managed Liquidity (those that are regularly traded on stock market) Hedging , Liquidity Very large appreciation

Disadvantage
Some may be less liquid , subject to market fluctuations Volatile , expertise required

Volatile , expertise required Uncertain, specialized knowledge required

Risk Return Hirerarchy

Dr. Shital Jhunjhunwala

Your Portfolio Rs. 10 Lakh

1. 2. 3. 4. 5. 6. 7. 8. 9. Gold (ETF) & Nikkei Index USD & Govt Bond (10 years) Nasdaq Index & Bank FD Euro & Balanced Mutual Fund(Growth) Petrol (Int. Crude Oil) & Sensex Nifty & Real Estate Fund CNX IT Index & Emerging Market Fund Nifty Midcap 50 & Commodity Fund Bank Index & Silver