Moneycontrol
Dec 16, 2017 01:14 PM IST | Source: Moneycontrol.com

Your Money This Week: How to invest if you can’t track markets; strategies to make most out of ELSS

A quick wrap of key developments in the personal finance space this week.

The US Fed raised interest rates by 25 basis points this week indicating positive outlook for the economy. This was closely followed by China which too increased its short term rates. The move by the two economic giants will certainly have repercussions on the global economy and flow of capital. Will these moves have an impact on India and what will be the Reserve Bank of India’s stance on interest rates in the coming months?

The RBI’s stance on interest rates has a deep impact on the economy and asset classes and as a corollary on your portfolio. The central bank had recently maintained status-quo on interest rates in its recent monetary policy review. In recent years, policy rates have been cut several times by RBI. However, could 2018 see a reversal in stand and how should you position your portfolio? Here's how the US Fed rate hike might impact your portfolio.

The Gujarat election results will flow in at the start of next week. All exit polls indicate a decisive win the ruling Bharatiya Janata Party (BJP). Many market experts believe that a BJP win is likely to spur the equity markets to new highs. In such a scenario, if you are an equity investor you are likely to gain good returns. However, many of us are unable to take advantage of short-term market moves due to out preoccupation during the day which renders us unable to track the trends. Here are some hacks to help you trade without tracking the market every minute.

It is also time that you start thinking of investing for saving on your tax liability. You should avail of the deductions provided under Section 80C of the Income Tax Act over the next three months. One of the most sought after tax saving avenues is the Equity Linked Savings Scheme (ELSS) of mutual funds. It has a lock-in period of 3 years and has the potential to provide you high returns linked to the market.

However, you need to have a firm strategy of your own to make the most of your ELSS investment.

Staying with mutual funds, it is not always good to concentrate all your investment in a single fund. There are various advantages of diversifying your investment over several funds.

If you are investing in mutual funds you might be faced with the dilemma of how many schemes you should ideally invest in? While there might not be a magic number for schemes one should invest in, most financial planners and investment advisors would tell you to have a diversified portfolio and not to concentrate your bets on a single scheme. Investing in one scheme can be risk prone. Read what experts have to say about the advantages of spreading your investments over a clutch of funds.

With 2017 coming to an end, companies are set to promote their products with sales pitch that might lure you to buying. It might also lead you to taking loans to buy things are beyond your present financial ability. Many of us get over-leveraged by availing loans without much thought on the repayment ability. Deferring loan payment on a regular basis or juggling with loans can add to your long-term debt burden and could land you into a ‘debt trap’ from which you might find difficulty in extricating yourself.

But what are early indications of your sliding into a debt trap? In we apprise you of some of the signs that you should track to know that you are slipping into a debt trap. All of us should try and avoid getting into such a situation.
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