| Rajshekhar Roy and Sorabh Kalra posted in Asan Ideas for Wealth . Rajshekhar Roy March 19 at 5:41am I am quite surprised to see that many people of this group and others have reacted negatively to the rate cuts and are upset about it. The same people are quite enthused when the RBI Governor cuts the rates. We need to understand the basic dynamics of the rate regime and the cut in small savings schemes are along the expected lines. I am a little surprised at the SSY cut but it still remains superior to the other schemes that one can invest in. There are no substantive changes required in your debt portfolio, though you will obviously have lower returns now. For my part, I will continue with PPF and avoid FD, Liquid funds and MIP for now. If at all I need to invest in debt it will be in short term funds but, even that is fraught with risk, as the recent Franklin imbroglio has shown. A shift towards Equity savings funds and Arbitrage funds may be a medium term strategy. For people scoffing at Tax free bonds earlier, if NHAI does come with a last tranche in the next week, invest in it without any more demurring. A pre-tax yield of 11% is gold in the current times and interest rate regime that we live in. Like Comment | | | | | | | | | | Rajshekhar Roy and Sorabh Kalra posted in Asan Ideas for Wealth. | | |  | | | | | I am quite surprised to see that many people of this group and others have reacted negatively to the rate cuts and are upset about it. The same people are quite enthused when the RBI Governor cuts the rates.
We need to understand the basic dynamics of the rate regime and the cut in small savings schemes are along the expected lines. I am a little surprised at the SSY cut but it still remains superior to the other schemes that one can invest in. There are no substantive changes required in your debt portfolio, though you will obviously have lower returns now.
For my part, I will continue with PPF and avoid FD, Liquid funds and MIP for now. If at all I need to invest in debt it will be in short term funds but, even that is fraught with risk, as the recent Franklin imbroglio has shown. A shift towards Equity savings funds and Arbitrage funds may be a medium term strategy.
For people scoffing at Tax free bonds earlier, if NHAI does come with a last tranche in the next week, invest in it without any more demurring. A pre-tax yield of 11% is gold in the current times and interest rate regime that we live in. |
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