These investments made us richer in 2007

By Elda Christy

Your investment result is out and it’s time to see the outcome of your hard work. So, let’s quickly find out if you have passed, failed or just managed to get decent marks in your respective subjects (read investments).

Your Report Card for 2007

Rank one: Equity stocks
Overall result: (Returns for the period between 27, November 2006 and 26 November, 2007.)

Sensex: 39.47%

Nifty: 44.41%

Individual marks

Top 10 performance among BSE-500 stocks
(Returns for the period between 20, November 2006 and 30 November, 2007.)

Hence, a stock market is a wise choice only if you understand that the market is not a money-making machine and there are enough risks involved in it. 

Tip for 2008: Financial domain trainer, PV Subramanyam says, “Though equity has given maximum returns in the last one year, you need to diversify your portfolio proportionately. Anyone with a two to three-year time horizon should look at debt instruments for wealth creation while equity is ideal for longer time frame. This thumb rule remains standard no matter what returns each asset class is giving.”

First runner up: equity mutual funds

Overall result:

Equity diversified: 37.3%

Equity tax saver: 42.3%

Balanced: 32%

Individual marks

Top 3 funds in each category
(Returns for the period between November 27, 2006 and November 26, 2007)

Remarks: So, you admit you don’t understand the stock market too well. But you still want to benefit from the market boom like many others. Mutual funds are the option for you.

You could invest in the market through safe hands and also make profits. What we mean by safe hands is the fund manager who would take care of your hard-earned moolah and invest it in the right place. But yes, you would have to pay the charges in the form of entry or exit load. 

Tip for 2008: Equity mutual funds are for the long-term. Don’t invest to make quick money. Remember that entry and exit loads need to be recovered too. Debt mutual funds give you tax benefits like tax-free dividends unlike bank deposits where the interest is taxed. Choose debt mutual funds over bank deposits if you are a high tax payer.

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