The financial year is about to end: Have you made the right investments
There are just a few days left for the current financial year (2020) to come to an end. While the last quarter of a Financial Year (FY) sees taxpayers scrambling for making tax-saving investments to lower their tax-liability, what’s essential is to make the right choices.
This article will help you analyse whether you have made the right investments or not.
Are your investments in tune with your financial goals?
- A goal-based investment approach results in the availability of funds at the right time. However, more often than not, investments made, particularly during this time of the year, is done with the objective to lower tax-liability.
- While tax planning is an essential aspect of personal finance, it’s equally important to ensure that your investments are in tune with the goals you have set for yourself. For instance, if you have planned to build a certain corpus for your child’s education within a specific time frame, make sure you choose investment avenues that help you do so.
Do your investments match your risk appetite?
- If you are an aggressive investor, you can bet on market-linked products such as an equity mutual fund. On the other hand, even if the slightest fluctuation makes you jittery, you can park your money in debt mutual funds and fixed-return products.
Is your investment liquid enough?
- Liquidity refers to the ease with which you can convert an asset into cash. When it comes to investments for goals such as building an emergency corpus, it’s important to ensure it can be easily accessed and liquidated.
- There are many investments that lock your money for a long period. While it makes sense to remain invested for a considerable period of time for long-term goals to give enough time for your money to grow, for extremely short-term goals and contingencies, your investments need to be liquid enough.
Do your investments give you the desired flexibility?
- Investments that bind you to a recurring commitment for long years can become tricky in case there’s a sudden brake on active income. Hence, it’s essential to make sure that your investments give the flexibility needed.
- For example, mutual fund investment through a Systematic Investment Plan (SIP) allows you to start with as little as Rs 500 per month. Also, you can top-up this amount with an increase in income. At the same time, you can exit your investment, if needed by paying a nominal exit load. The exit load is applicable only if you quit within a year of investment.
- Answering the above questions will help you judge if you have made the right investments or not. If yes, keep a track on them and make changes if required. On the other hand, if you haven’t, take corrective measures immediately.
The contents of this document are meant merely for information purposes. The information contained herein is subject to updation, completion, revision, verification and amendment and the same may change materially. The information provided herein is not intended for distribution to, or use by, any person in any jurisdiction where such distribution or use would (by reason of that person‘s nationality, residence or otherwise) be contrary to law or regulation or would subject lClCl Bank or its affiliates to any licensing or registration requirements. This document is not an offer, invitation or solicitation of any kind to buy or sell any security and is not intended to create any rights or obligations. Nothing in this document is intended to constitute legal, tax, securities or investment advice, or opinion regarding the appropriateness of any investment, or a solicitation for any product or service. Please obtain professional legal, tax and other investment advice before making any investment. Any investment decisions that may be made by you shall be at your sole discretion, independent analysis and at your own evaluation of the risks involved. The use of any information set out in this document is entirely at the recipient's own risk. The information set out in this document has been prepared by ICICI Bank based upon projections which have been determined in good faith by lClCl Bank and from sources deemed reliable. There can be no assurance that such projections will prove to be accurate. lClCl Bank does not accept any responsibility for any errors whether caused by negligence or otherwise or for any loss or damage incurred by anyone in reliance on anything set out in this document. The information set out in this document has been prepared by ICICI Bank based upon projections which have been determined in good faith and sources considered reliable by lClCl Bank. In preparing this document we have relied upon and assumed, without independent verification, the accuracy and completeness of all information available from public sources or which was provided to us or which was otherwise reviewed by us. Past performance cannot be a guide to future performance. 'lClCl ' and the 'I-man' logo are the trademarks and property of lCICl Bank. Misuse of any intellectual property, or any other content displayed herein is strictly prohibited.
Scroll to top