5 Smart Money Moves To Improve Your Finance

5 Smart Money Moves . Though it had begun on a promising note, 2016 turned out to be a disappointing year for equity investors. But investors in debt and gold earned decent returns. Analysts believe the poor performance by equities might continue in 2017 due to the impact of demonetisation.

5 Smart Money Moves

5 Smart Money Moves

5 Smart Money Moves

1. RESTART SIPS AND CONTINUE REGULAR INVESTING

Financial advisers who tell investors to ignore market movements and continue investing are often derided as someone trying to sell mutual funds. But a study by ET Wealth shows that regular investing yields better results than trying to time the market. For instance, the Brexit vote came as a big shock to everyone and caused the Sensex to drop more than 600 points.

If you had redeemed your equity investments a day before the Brexit vote, you could have missed the crash on 24 June. But you would have also missed the 1,500-point rally that followed.

2. USE TAX-FREE OPTIONS SUCH AS VPF AND PPF
Banks have cut deposits rates sharply after huge inflows postdemonetisation. A five-year fixed deposit will now give about 7%. In the 30% bracket, the posttax yield will be less than 5%. But there are other more lucrative avenues for fixed income investors. The Employees’ Provident Fund (EPF) and the Public Provident Fund (PPF) still offer attractive rates.

3. TRAIN KIDS, WORKERS TO GO CASHLESS

As the government pushes ahead with digitisation of currency, you would do well to acquaint yourself with the emerging modes of cashless transactions in 2017. But the learning should not stop there. Teach your children and even those who work for you (housemaid, driver, watchman, milkman, gardener, newspaper vendor) on how to go cashless can find here.

4. LINK AADHAAR WITH BANK A/C, INVESTMENTS

Even before the Aadhaar payment app was launched, the 12-digit number was playing an important role in your finances. It acts as a one-stop KYC authentication for all your investments and accounts. Already, you can open an NPS account using the Aadhaar. You can also buy an insurance policy completely online if you have an Aadhaar-linked account. The Employees’ Provident Fund Organisation has also made it mandatory for Aadhaar to be linked to the subscriber’s account.

5. REDUCE EXPOSURE TO GOLD IF OVERWEIGHT

Financial planners usually recommend that the allocation to gold should not be more than 10% of your investment portfolio. If you have more than that, it may be time to reduce some of the holding in gold. “Unless you need gold for personla use such as a wedding, stay away from gold,” says investment adviser Vipin Khandelwal.

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