Tuesday, June 10, 2008

India: Investing...

In India, assured profit days are almost over now. And with more investment products comes increased benefits and options but also ofcourse increased the complexity of understanding/evaluating.

Recently I read article which gave good indicator to measure investments options. It is- tax, risk, liquidity and ofcourse ROI(return on investment). Article outlined the usual good indicators, some interesting point worth a mention:
  • Risk- Aim should be managing risk and not evading risk. since Investing and risk go hand in hand. not investing is also a risk. also peer(product/offering) comparison is good indicator of risk involved.
  • Liquidation- should keep about 4-6 months of average monthly expenses in savings account or short term FD or Floating Rate/Liquid Funds. This, in most situations, should be sufficient to meet any emergency.
  • Tax- different tax applies for different investment options and ofcourse tax has impact on return.
  • Return- peer product comparison might highlight risk. Expectation should be according to current market conditions.
Good investing is all about getting the right mix of all these factors according to risk preference and investment goals.

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