Diversifying one’s portfolio beyond stocks is essential in the present market. Time and again experts have stressed on the mantra of diversification. If you’re looking for ways to create wealth and enhance portfolio performance, you have to go beyond stocks & mutual funds and create a diversified portfolio. Fortunately there are several non stock–market linked investment options that you can use to achieve this goal.
Some personal finance experts who suggested some options that you can explore in 2023 to build wealth outside the stock market. Let’s understand the top 10 ideas on type on investments to amass huge wealth.
1) Corporate Bonds
You can invest in corporate bonds if you wish to earn stable returns over a 12 to 36 month period. This investment is ideal for risk-averse investors seeking to beat inflation, earn more than fixed deposits and move idle money sitting in their savings account to an asset that can earn up to 11% YTM. “You should opt for listed and rated corporate bonds here as they give you an additional layer of credibility,” says an expert.
2) Digital Gold
Digital gold is a mode of investing in physical gold. It is just like the regular gold, can be bought online and is stored in insured vaults by the seller on behalf of the customer. You can buy or sell 24 karat Hallmark gold for as low as ₹1.
“Given the current macros, investments in gold either through ETFs, digital gold or even through sovereign wealth bonds is an interesting option,” said Sucheta Mahapatra MD at Branch International, India.
3) Fixed Deposit
Fixed deposit is a safe investment option that guarantees consistent interest rates, special interest rates for senior citizens. In order to combat inflation, the RBI has increased the repo rate by 225 basis points since May, reaching 6.25% in FY23. The hike in repo rate has made the FD rates more lucrative for investors.Term deposits can also be considered. “3 year+ FDs that are now offering yields upwards of 8%,” Post office deposits like NSC, PPF, RD, FDs, MIS etc, are also attractive.
4) Real estate
For those with a longer-term investment horizon, real estate is an interesting class to evaluate especially through newer instruments like REITs and fractional real estate investing through digital platforms, said Sucheta Mahapatra.
5) Peer to Peer (P2P) Lending
Peer-to-peer lending is a great way to earn 10-12% returns. Investors should look into it as a means to diversify their portfolio outside of the stock market. “This choice is now available to regular investors,”
“There are platforms that let you do this where people who need liquidity are able to borrow from you and you earn a higher return than you would from your savings account of FD. In such cases it is important to identify the right platform with a solid track record and low to no NPAs (non-performing assets). You may also be able to lend money to organisations instead of individuals in some cases which gives you an added layer of trust,” said an analyst.
“I would like to re-frame the objective as generating returns in line with risk appetite. Beyond stocks, the India market has matured to have a variety of assets with exciting risk-reward profiles. For example, P2P investments are emerging as a fast-growing investment class. They offer higher returns than fixed deposits or government bonds, have a low entry barrier, easy access and are supported by credible platforms with effective risk management capabilities,” he explained .
6) Asset Leasing
Asset leasing is a lesser-known investment option that allows you to invest money used to lease physical assets to businesses and receive consistent returns from them. “It may help you earn up to 12% post-tax profits,
“This is an asset-backed alternative investment option that can help you earn fixed non-market linked returns by leasing assets to corporates. This sort of investment can give you up to 22% pre-tax IRR,”
7) Startup Equity
You can also explore Startup Equity for long-term goals if you are open to the higher risk-reward ratio. Investing in high-growth, early-stage companies can help investors take advantage of the booming startup ecosystem. “Such investments were earlier only accessible to VCs, angel investors and HNIs with the right connections, Today there are several platforms that are democratising access to such investments and offer them at reduced ticker sizes. This means you get to invest with as little ₹2,00,000 instead of double digit lakhs or crores, he added.
8) Inventory Finance
Investing in Inventory Finance is a great way to achieve your short-term goals as there are options with tenures ranging from 1-13 months. According to an expert,it is ideal for investors looking for faster, inflation-beating returns over a short tenure by financing inventory for companies.
This investment asset can offer you up to 12% pre-tax yield, he added.
This 2023, beat market volatility with these alternative investment options suggested by the experts and choose the aligns best with your investment goals.
9) Mutual Funds
offer the best opportunity to create wealth over a longer period of time. In fact the returns are amazing over a five year period , much above Bank and other types of investments. Better to consult the investment advisors and make a beginning right now without any loss of time. One can create a corpus for higher education of children, their higher studies, overseas education, asset purchase like luxury cars, even High end Homes over a long period of say 10 years.
10) Stock Markets:
No other investment gives as much as Share markets wherein there is no upper limit to earn. Only thing is to be smart in investing the latent potential stocks identified with a long term view. This needs an expert knowledge and study or through a consultation with the experts in the field.Start investing in small lots of companies with a track record and carefully follow them up to see their growth over mid/long term.
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