Looking at diversification for higher returns? This investment idea could be worth looking at

Looking at diversification for higher returns? This investment idea could be worth looking at

Hi, I am 40 years old and have been investing in equity markets for the last 10 years. Going forward, I want to diversify and make investments that give predictable yet high returns. Investing in FDs does not seem appealing to me due to low returns. What options are available to me?

Reply by Nikhil Aggarwal, CEO & Founder, Grip Invest

Equity markets provide the potential for high returns, but also volatility. At this stage, seeking predictable income without sacrificing growth is a wise move. Traditional fixed deposits (FDs) might not be ideal due to their lower yields as you also suggested.

This is where Securitised Debt Instruments (SDIs) could be a transformative element in your investment strategy. They offer fixed monthly returns that are independent of stock market fluctuations and have limited risk. Even better, “AA to A” rated SDIs can potentially deliver returns of 10-12%, exceeding FDs by 50-100% more returns.

Think of it as doubling your returns compared to traditional fixed-income options.

However, remember, no investment is risk-free. While SDIs offer stability, thorough research on the issuer and the underlying assets backing the instrument is crucial. Don’t just jump in – understand the risks involved.

By strategically incorporating SDIs into your portfolio, you can achieve a better balance between predictable income and growth, while still managing risk. You can also consult your financial advisor to help ensure these investments align with your overall financial goals and risk tolerance.

(Views expressed by the investment expert are his/her own. E-mail us your investment queries at [email protected]. We will get your queries answered by our panel of experts.)

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