Protecting investment portfolio during reducing GDP and returning inflation
During the first quarterly of this present fiscal year, the GDP growth rate has been a mere 4.4 %. In the middle of this, the GDP-Credit ratio has reduced to 66 %. The current account deficit (CAD) of country is standing at dangerous level. The inflation crone has for once again has begun rearing its ugly head. Despite all the attempts to bridle inflation, RBI has raised its hand s in defeat. This article suggests means to secure your investments under this developing situation.
Based on wholesale price index (WPI), the inflation rate has enhanced up continuously in the next month in July reaching at the 5.97 % mark. The rate of retail inflation (CPI) is still maintaining its higher level. The chain of collapse of rupee in term of dollar is knowing no levels of stopping. Prices of petrol and diesel have already been raised.
Have you ever thought that under such an environs, what is the position of that money of yours' that are kept secured in banks? What the condition is of the investments that you have done? The answer is quite clear. The return being gotten on such returns is on a lesser rate than the rate of inflation. Under the circumstance, prepare such a strategy that not only safeguards from these onslaughts but helps in reaping benefits from it also. Let us come together to see, what the impact of the galloping inflation is on these asset class.
Take the routes to commodity with great caution
The commodity market reacts to maximum extents in accordance with the moods of economic conditions. You must have heard of the dangerous story of commodity market. According to experts, investment in commodity provides a shield to the investors also against the mounting inflation because increase in the inflation rate increases the prices of commodities. Since, this year round, monsoon has been good, therefore, a better prospects of benefits form up by investing in different agro commodities in 2013. Due to the Syrian crisis, among other commodities, swell in crude oil is looming large. Owing to the fast rise and fall in the monetary market, gold is touching newer highs. Experts agree that its movements could reverse by the changes in these factors. Hence, stay at a distance from this. Study of market condition is necessary before investments into the commodities. Investors should have the knowledge of production of exports and imports and their rate of consumption different commodities. In addition, the tabs should be paid put on the world production rate of that particular commodity and demand. You can gain maximum returns from this stratagem.
In case you cannot do it yourself
The investor who cannot do this on their own can deploy their fund in diversified funds. 'Birla Sun Life Commodity Equity Fund', 'Fidelity Global Real Assets Fund', 'China Equity Offshore Fund', etc are maintaining a better off record of accomplishment, which should attract your attention for investment. There is the commodity future option also available with you in addition. However, you will need a big fund for this and that involves risks.
Take advantage of the real estate
Investing in the 'Direct Plan of Mutual Fund' is highly rewarding. In the midst of mounting pressure of inflation, investing in real estate is also a better option because of the increase in inflation rate, construction cost increases triggering steep jumps in price of properties also. If you have fund with you available until the next months, take advantage of the stagnant price of real estate. Do negotiate well and it is hoped you might land yourself in some handsome deal. Due to increasing inflation, prices of properties in every city are galloping. The price of the home you are dwelling in is continually mounting upward while you are asleep. Not merely this, if you have rented your property, its rent would also be augmenting due to the inflation. Although the problem of this option is that it requires a big capital that not everybody is supposed to be having. Besides, it lacks liquidity too. Please note here and now that in the coming days after the passing of the land acquisition act and real estate regulation act, the price of land buildings could again jump up.
Save your fingers from getting burnt up in the share market
The government has raised the petrol diesel prices once again. Since petrol, diesel and LPG is included in the list of daily need, they will have to be bought no matter how much prices on these products are hiked. Increase on these products empties the pockets of common people but this very step comes up with benefits for the gas and petroleum producing companies. Under such a spin, the investors could park their surplus fund in companies of this sector. Where the nifty has suffered the loss of 5 % during last five months, the shares of Cairn's India has jumped up by 10.5 %, Indian oil have gone higher by 7 %, and LNG shares have appreciated by 6 %. Experts point out that during the course of increasing inflation, investing in those companies are highly paying that produce items of daily uses of masses. The direct benefit goes straightaway to the FMCG companies. Here, you could chiefly bate on those companies that are connected with food industries. Investors at this hour can invest in the shares of those companies which have no loans and which are flush with fund.