By BankBazaar.com
In uncertain times everyone takes comfort with their best friends. Similar is the case with the investor community. Whenever market volatility increases, inflation raises its head, interest rates are rising and there is fear of economic down turn, focus of investors shift from capital appreciation to capital preservation. This is the time investors remember the old and trusted buddy "Debt Investment", whom they normally forget in good times. In this article we will try to understand why this instrument acts as a savior and find out the reason why it takes the back seat when the investor community is in a positive mood. We will also try to figure out when the right time to invest in debt instruments is and what are the options available with us. Debt Instrument A debt instrument is an asset that pays fixed returns over time. It has a fixed maturity period after that the investors can liquidate the asset and gets the principal with the remaining interest dues. Debts are low risk, low return assets. The liquidity is low to medium.There are many debt types available to investors to choose from. a. Fixed Deposits
b. Debt Mutual Funds
c. Bonds and Debentures
d. Government managed saving schemes (NSC, KVP, PPF) Debt Instrument
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