Savings avenues for retail investors have been few and far between over the past few months, with opportunities to nurture money, leave alone value appreciation, hitting a rough patch.
"The debt market has seen extreme volatility with G-Sec yields starting with 8-8.1% going down
to 7.1% before rising again to the current levels of 8.2%," says Sriram Iyer, chief business officer, Religare Macquarie Wealth Management.
The Sensex for instance has shed some 800 points or approximately 4% of its value from January 1 till date. "Several estimates on corporate earnings have gone haywire with the sharp depreciation of the rupee and the inverted bond yield curve," says Sachin Shah, fund manager at Emkay Investment Managers.
Global issues too had a role in the volatility of the rupee. "As recovery in the US has become more entrenched, the Fed has signalled its intention to begin turning off its monetary stimulus taps," says Rajesh Cheruvu, chief investment officer, RBS Private Banking. Portfolio flight hit emerging markets like India, a major beneficiary of US QE in recent years particularly hard.
Domestically too there is uncertainty. Fortunately, however even in these volatile times there are stable investment options for retail investors.
"Given the fact that (short term) rates have shot up by 200-250 bps (basis points - one basis point is one hundredth of a percentage point), it is an opportune time to invest in accrual funds and fixed maturity plans to lock-in higher yields. Also short-term funds will do well over time with interest rates coming down," says Iyer.
What about investing in gold, traditionally a safe-haven against volatility? "As and when QE is scaled back, we are likely to see further bouts of volatility in gold," says Cheruvu.
Shares in export-oriented sectors with dollar-denominated revenues such as pharma and IT are expected to outperform, says Shah.
FMCG stocks are also expected to do well.
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